A good CIBIL is required to obtain approvals for loans with favourable terms and lower interest rates. Whether you seek a house, car, or personal loan, a good CIBIL score simplifies things. This blog will enlighten you with techniques to enhance your CIBIL score for loan approvals with favourable financial terms.
Why is Having a Good CIBIL Score Important to Get Swift Loan Sanction?
A CIBIL score is one of the most critical parameters lenders consider when approving or rejecting a loan application. Your score is the only factor lenders count on to determine whether you are creditworthy or not.
750 to 900 is considered very good, and you will most likely repay the loan in time without default. A good CIBIL score leads to faster loan sanctioning, reduced interest rates, and larger loan sizes. On the other hand, a poor score may result in rejections or increased interest rates. Thus, a good score ensures that you have a better chance of getting the loan quicker and on better terms.
Best Tips to Raise Your CIBIL Score for Quicker Loan Sanction
Your CIBIL score cannot be raised overnight, but there are specific methods by which you can gain an immediate increase in your score. Read on to learn how to raise your CIBIL score to get a quicker loan sanction.
Monitor Your CIBIL Score Periodically
The first step to help improve your score is to know where you stand. In case you're wondering how to know my CIBIL score, you can do so online. All major financial institutions like Bajaj Finserv offer free viewing of your CIBIL score. Regular checking will enable you to track your progress and identify any mistakes or errors in your credit report that can bring your score down.
Steer Clear of New Credit Inquiries
Every time you acquire a new loan or apply for a new credit card, the lender makes a hard inquiry, which hurts your CIBIL score. Even though the inquiries cannot be avoided, do not apply for numerous credit cards and loans within a short period. Each hard inquiry adds to your credit report and reduces your score temporarily.
Negotiate with Creditors to Delete Negative Marks
If you have some delayed payments or late payments, contact your creditors and request them to remove these negative entries from your credit report. Creditors will not always agree, but it is always better to ask, especially if you have settled the debt in full. This is beneficial for your credit history, which, in turn, will increase your CIBIL score.
Maintain a Good Credit Mix
A favourable mix of credit—such as secured loans, credit cards, and personal loans—improves your credit score. It indicates that you are capable of managing different types of credit in a responsible manner. But don't avail yourself of new credit cards and loans merely to diversify your credit. Avail yourself of only so much credit, which you can manage and repay within time.
Dispute Mistakes in Your CIBIL Report
Mistakes or outdated information in your CIBIL report will lower your score. If you find any mistakes or inconsistencies, inform the credit bureau immediately. Bajaj Markets and other lenders allow you to file disputes online, which helps to correct wrong information immediately.
Select a Credit-Builder Loan
If you lack a credit history or have a poor score, go for a small credit-builder loan. Credit-builder loans are designed to allow an individual to build or rebuild his/her credit history. If you repay the loan within the given time period, you can build your score gradually.
Can You Maintain a Good CIBIL Score for a Longer Period?
Once you improve your CIBIL score, you should maintain it at a healthy level in the long term. Continuous improvement isn't required to get a healthy score, but periodical maintenance is crucial to maintain it. Follow these steps to maintain a healthy CIBIL score in the long term:
Timely Payments
Always pay on time. For credit cards, loans, or your electricity bill, paying your dues on time is very important for a good credit record.
Don't Overuse Your Credit
Too much credit misuse hurts your credit record. Keeping your utilization below 30% of your available credit is best for a good score.
Don't Close Old Accounts
Closing out your oldest accounts lowers the age of your credit history and harms your score. Avoid closing unused credit cards unnecessarily.
Conclusion
A good CIBIL score is essential for quick loan approval. Ask your lender how to know my CIBIL score, as along with prompt payment of bills, and debt repayment, regular checking of your score is equally important for improving your CIBIL score within a short period. Regularity is the secret to a high score so that loans are easily available at any point of need.