Credit Score: The key to your financing prospects
A CIBIL score acts as your own personal financial history, summed up in a three-digit figure. Your Credit Information Report or CIR reveals your repayment history involving credit cards and loans, and impact your chances of getting loans in the future. If your credit score scales are healthy, you can avail of a Personal Loan by Bajaj Finserv that is approved online within minutes. There are many factors that influence how credit score is calculated in India, including how you make use of your credit cards, whether repayments are made on time, types of loans you have applied for and the number of times you have availed of a loan in the past. Your CIBIL report has two important sections, namely ‘Enquiry’ and ‘Accounts’. It is based on the information given in these two sections that your CIBIL score is calculated.
Understanding Credit Score Evaluation
The first thing prospective lenders do before signing off on a loan is check the applicant’s credit score. This should tell you something about the importance of maintaining a reasonable credit score. A healthy credit score range is anywhere between 750 and 900. Frequent defaulting on repayments can lead to a low score. The amount of credit you use and the number of accounts that are past their due date for payments are considered prominently while calculating your credit score. Getting a loan written off can also bring your score down and the more recent and frequent write-offs recorded, the more your score dips. Applying for more unsecured loans as opposed to secured ones will also lead to a low score as it shows negative credit behaviour. Finally, frequent loan inquiries are also taken into account while calculating your credit score.
Why Maintain a Healthy Credit Score?
One of the prime reasons to have a good credit score is that it makes you eligible for a loan in the future. That is not all, as you can also get loans at competitive rates based on a trustworthy score. NBFCs like Bajaj Finserv offers Home Loans for Salaried and Self-Employed consumers, with attractive interest rates. Even when applying for a credit card, your past credit history is looked into and you are less likely to get one if you have a low credit score.
How to Raise Your Credit Score
If you have a miserable credit score, fret not. There are steps you can take to improve your credit score and avail of loans in the future. Bear in mind to not borrow more loans than you can manage to pay off. If you already have a loan or credit card, ensure that EMIs are paid on time and avoid defaulting on the repayments. When you have extra funds on hand, use them to prepay a loan. Be careful in standing guarantor for a loan for someone you don’t know since that can also negatively reflect on your credit score. Another good way to raise your credit score is to avoid having add-on users with your credit cards.
With a good history, you can apply for Standard Chartered World and Platinum Credit Cards by Bajaj Finserv.