The rise and fall of Credit Scores
CIBIL, or the Credit Information Bureau India Limited, keeps tabs on your loan and credit card payments, and generates a score based on the same. This score fluctuates based on the various transactions you make. A good credit score will allow you to enjoy numerous privileges while a bad score can deeply impact your chances of getting a loan. With consumer needs increasing by the day, Bajaj Finserv is happy to help with Personal Loans that you can use for any financial requirement that arises. This sort of loan can be completely processed online.
What’s the Deal with a Credit Score?
Credit score, also known as your CIBIL score is a three-digit numeric summary that reveals your credit history. It is based on this figure that your eligibility for a loan is decided. It also tracks your entire credit history and can pinpoint defaults which can hinder the process of borrowing financial aid. This score is based on the information given to CIBIL by your bank or any other lending institution you use. Therefore, it is essential that even if your score falls, you take the steps necessary to raise your credit score. Loans for a new home, vehicle or even a personal loan can be availed based upon a good credit score. Bajaj Finserv offers you a Home Loan with low interest rates that you certainly don’t want to miss out on.
Why the Decline Despite no Default?
Sometimes despite making payments on time, your credit score can still take a tumble. You will notice that your score has gone down even after you have cleared off a debt. There are many reasons for credit score drops. After a debt is cleared, that line of credit is closed which in turn leads to a low score. However, this is only a temporary drop and it will only be a minor fluctuation.
Another reason is your debt utilization ratio. Once you pay off a loan, your account for that debt is closed and therefore depletes your combined credit limit. Other factors that contribute to a falling score include defaults on repayments in the past or high credit utilisation.
Improving Credit Scores is Possible
There are several benefits that come with a good credit score. With improved credit scores, you can even avail of Two and Three-Wheeler Finance from Bajaj Finserv. However, you don’t have to worry if your scores are low as there are steps on how to improve credit score online. You can start by being wise in the use of your credit cards. Be consistent in repayments as this will improve your credit worthiness. Opt for more of secured loans and fewer un-secured loans to maintain a good score.
And finally, avoid displaying signs of credit-hungry behaviour and remember not to constantly apply for new loans. Keep these factors in mind and you should have no trouble applying for a new loan, even if your credit scores dips a little.