Are you ready to apply for home loan, personal loan, business loan or any other type of loan in the future? Have you checked the loan eligibility factors before applying for the loan to a lender? Yes, it is vital to be aware of the loan eligibility aspects to get a loan approval at a lower rate of interest.
The loan eligibility parameters could be many such as your age, income, employment stability, and the city of residence. However, the one factor that can make or break your loan application is the CIBIL Score. Yes, any lender that will review the first thing about your loan candidature is the Credit Score. Having a higher or lower CIBIL Score makes or breaks your creditworthiness.
As per the recent trends in the finance industry, to avail a loan easily at a lower rate, one needs to have a CIBIL Score that reads 750+ or more out of 900.
If you are going to apply for a personal loan, then the CIBIL Score for personal loan’s approval should also be at least 750+. Some lenders may approve a loan request even if you have a lower Credit Score for personal loan. But, for that, you will need to cough up higher personal loan interest rates which may affect your monthly budget.
Hence, before applying for a home loan, personal loan or any other, you need to know how to increase your CIBIL Score. If you don’t know about some of those easy tips to help you do that, this post is here to assist you. Let’s begin:
1) Never Miss the Payments’ Due Dates
Missing the due date of your credit card, existing loan EMIs, always have a negative impact on your credit history and may bring down the CIBIL Score. Even if you have missed a single EMI for your ongoing loan, it is bound to affect your CIBIL Score. Not paying the EMIs on time is reported to the credit bureaus that you are not a responsible credit user. Hence, when your CIBIL Score confirms the same, your next loan application gets rejected.
2) Maintain a Healthy Credit Utilization
Managing healthy credit utilization is nothing but how much credit limit you have availed out of the offered limit. Example – if your credit card limit is Rs.2 lakh and if you have used only Rs.80,000, the credit utilization ratio is 40%. Thus, it is often suggested by industry experts never to max out your credit card or use it up to 80%. If you can manage it up to 40-60%, your CIBIL Score will not get hampered.
3) Don’t Apply for Many Credit Cards/Loans at Once
Many people have this tendency of applying to many lenders for a loan and many credit card companies for credit cards so that at least one will approve the requests. Nonetheless, this practice is not going to help you and decrease score of your CIBIL considerably. It is because every time you submit a loan/credit card application, your lender pulls out the CIBIL Score. The fetching of the Credit Score many times lowers it down. Lenders may also consider that you may be credit hungry and may reject your loan/credit card application.
The Bottom Line
Applying for a loan at a lower rate of interest is what that should matter as you also need to repay it. Hence, try to implement the discussed tips so that your loan application is approved and your CIBIL Score stays up and healthy! All the best!
The loan eligibility parameters could be many such as your age, income, employment stability, and the city of residence. However, the one factor that can make or break your loan application is the CIBIL Score. Yes, any lender that will review the first thing about your loan candidature is the Credit Score. Having a higher or lower CIBIL Score makes or breaks your creditworthiness.
As per the recent trends in the finance industry, to avail a loan easily at a lower rate, one needs to have a CIBIL Score that reads 750+ or more out of 900.
If you are going to apply for a personal loan, then the CIBIL Score for personal loan’s approval should also be at least 750+. Some lenders may approve a loan request even if you have a lower Credit Score for personal loan. But, for that, you will need to cough up higher personal loan interest rates which may affect your monthly budget.
Hence, before applying for a home loan, personal loan or any other, you need to know how to increase your CIBIL Score. If you don’t know about some of those easy tips to help you do that, this post is here to assist you. Let’s begin:
Missing the due date of your credit card, existing loan EMIs, always have a negative impact on your credit history and may bring down the CIBIL Score. Even if you have missed a single EMI for your ongoing loan, it is bound to affect your CIBIL Score. Not paying the EMIs on time is reported to the credit bureaus that you are not a responsible credit user. Hence, when your CIBIL Score confirms the same, your next loan application gets rejected.
2) Maintain a Healthy Credit Utilization
Managing healthy credit utilization is nothing but how much credit limit you have availed out of the offered limit. Example – if your credit card limit is Rs.2 lakh and if you have used only Rs.80,000, the credit utilization ratio is 40%. Thus, it is often suggested by industry experts never to max out your credit card or use it up to 80%. If you can manage it up to 40-60%, your CIBIL Score will not get hampered.
3) Don’t Apply for Many Credit Cards/Loans at Once
Many people have this tendency of applying to many lenders for a loan and many credit card companies for credit cards so that at least one will approve the requests. Nonetheless, this practice is not going to help you and decrease score of your CIBIL considerably. It is because every time you submit a loan/credit card application, your lender pulls out the CIBIL Score. The fetching of the Credit Score many times lowers it down. Lenders may also consider that you may be credit hungry and may reject your loan/credit card application.
The Bottom Line
Applying for a loan at a lower rate of interest is what that should matter as you also need to repay it. Hence, try to implement the discussed tips so that your loan application is approved and your CIBIL Score stays up and healthy! All the best!
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