Keep your Credit Score safe while searching for and selecting the perfect Loan
A loan can be regarded as a personal saviour in times of need. Whether you’re looking to have a little more cash on hand, or want to finally close the deal on that home you’ve been dreaming about.
Luckily for you, Bajaj Finserv has a number of customized Loans designed to fit your personal needs. But before you run off into the sunset with your newly acquired funds, there are a few important things to consider.
The link between Loans and Credit Scores
As you begin your search for the perfect loan, you’ll notice that each time you apply, a lender will review your credit report. This is known as a hard inquiry, and it generally applies to home, business, or personal loans, among several other categories. This, in turn, can drop your credit score by a few points with each inquiry. So before executing your search, strategically plan which lenders you want to apply with in order to minimize your point loss. Bajaj Finserv provides you with a timely and prompt application process for all of their Loan options, ensuring that you can complete this process with as little hassle as possible.
Now that we understand how loan shopping affects your credit score, it’s time to look at how loan modification can also affect it. When you’re feeling a little in over your head with your monthly loan payments, a loan modification might be in order. However, some loan modification programs can mark the reduced repayment as debt settlement, or less than originally agreed to, which might lower your credit score. It is important to consider these factors before choosing a payment modification plan.
Personal Loans and Credit Scores
You might now be a little concerned how a personal loan can affect your credit score as well. This type of loan is classified as “unsecured debt,” which simply means that it is not tied to a piece of collateral, such as a house is to a home loan. When lenders report personal loans to the credit bureau, they provide the loan amount, as well as information on timely and late payments. The more on time you are with your payments, the better your score will ultimately be.
While all of this information might seem a little overwhelming, rest assured that Bajaj Finserv has extremely reasonable payment plans for all of their Loans, including both Personal and Home categories, making it easier to keep that credit score up.
Improving your Credit Score
Now that you understand the factors that might be affecting your credit score, it’s time to see how we can improve it. There are three major ways that you can do this. First, it is important to maintain a consistent payment history. This means paying your monthly instalments on time every month. Second, you should pay more than the minimum amount due each month, allowing your overall balance to decrease, while your credit score increases. Finally, reducing your balance to less than 30% of the original amount as soon as possible will also bring a significant raise to your credit score.
Additionally, there are also ways to improve your credit score online. The internet is your friend. Using it to keep tabs on your credit report and various accounts is a great way to strategize how to continue to boost your score. Bajaj Finserv can also help with this by use of their Flexi Loans, which allow you to pay online each month in a simple and efficient manner.