Finance

How to increase CIBIL score? Know the method – How to Improve CIBIL Score?

How to improve CIBIL Score

Whether it is a business loan, home loan, car loan, or any loan, getting it is decided on the basis of the CIBIL score of the person applying for the loan. Having a good credit score is very important for all types of loans.

The lending bank or non-banking financial company (NBFC) company, while giving the loan, always keeps in mind that the CIBIL score of the loan being given should be in good standing. Checking the CIBIL of lending institutions is an essential parameter.

Let us understand what is the way to correct CIBIL score and how to improve CIBIL score that has deteriorated:

What is Cibil Score?

A credit score is a three-digit number. It is a number between 300 and 900. The original name of CIBIL Score is Credit Score. A company called CIBIL does credit score making, hence the credit score was named CIBIL Score.

The full name of CIBIL company is Credit Information Bureau (India) Limited. This company monitors the loan transactions from the bank account of the people and the methods of repayment of the loan and prepares its report.

CIBIL Company mainly works as an agency. Whenever a person applies for a loan from a bank or NBFC company, the lending company checks the credit score of that person by purchasing it from the CIBIL company. Let us tell you that if you want, you can check your CIBIL score yourself.

Helps in getting a quick business loan

Whenever a person applies for a loan, then the company or bank from which he applies for the loan, then the lenders first check the credit score of the person applying. The loan file proceeds only if the credit score is more than 700. not otherwise.

In such a situation, for people whose credit score is more than 700, after applying for the loan, it does not take much time to get the loan. The loan gets approved quickly. The lending companies believe that people who have a credit score of more than 700 have higher repayment capacity and they repay the loan amount quickly.

A loan is available at a relatively low-interest rate

Yes. The interest rate of the loan is also lower if you have a better credit score. Loan companies give priority to people with high credit scores. To woo people with a good credit score, loan companies offer loans at low-interest rates.

What are the reasons for reducing the CIBIL score?

In the CIBIL Score Calculation, there are many reasons due to which the CIBIL Score gets reduced. Let us have a look at those reasons:

Forgetting the loan EMI payment date

This is one of the main reasons for the low credit score – the EMI of the previous loan is not deposited on the due date. When the loan EMI is not deposited on the due date, then in that condition CIBIL institution assumes that the person concerned is not sincere to repay the loan. That’s why the credit score is given low. For a better credit score, it is important to deposit the loan EMI for a stipulated period.

Applying for more than one loan at a time

Only one loan in the name of any individual at a time is considered better. Having more than one loan is more likely to result in a lower credit score. When a person has to apply for a loan in more than one company at the same time then he is considered hungry for a loan. It is written on the credit report. This is also one of the main reasons for low credit scores.

Make tough inquiries from lending companies

It often happens that those who are in need of a loan start making inquiries from the lending company several times. Or frequently inquire for a loan even if not eligible for a loan or inquire for more amount while being eligible for less amount also lowers the credit score.

Apply for a loan

Always check your CIBIL score before applying for a loan. Before applying for a business loan or any other type of loan, you must check your CIBIL score. Checking your credit score gives you an idea of ​​your current credit score. If it is low then it can be corrected within 2 to 3 months of CIBIL score.

krunal3536

Share
Published by
krunal3536

Recent Posts

Specifications of Redmi Note 12 Pro series revealed before launch, will be provided with 120W fast charging

Specifications of Redmi Note 12 Pro series revealed before launch, will be provided with 120W fast charging

Overview Xiaomi's Redmi Note series recently launched the Redmi Note 11 Pro in January 2022…

5 months ago
RR vs RCB: Rajasthan and Bangalore face to face today, Sanju eyeing a hat-trick of victory, Yuzvendra Chahal’s challenge in front of RCB

RR vs RCB: Rajasthan and Bangalore face to face today, Sanju eyeing a hat-trick of victory, Yuzvendra Chahal’s challenge in front of RCB

Overview Rajasthan team has excellent batsmen and bowlers, but there is a dearth of good…

6 months ago
Mega-merger: HDFC and HDFC Bank will merge, Chairman Deepak Parekh, said- I could not sleep for two nights

Mega-merger: HDFC and HDFC Bank will merge, Chairman Deepak Parekh, said- I could not sleep for two nights

Overview Housing Development Finance Corporation (HDFC) and HDFC Bank have introduced a merger. Under the…

6 months ago
How the virus reaches your smartphone, what is the way to prevent it

How the virus reaches your smartphone, what is the way to prevent it

Overview Do not connect your phone to an unknown computer or laptop. The system you…

6 months ago
KKR beat Punjab by 6 wickets: Russell turned the tide with 8 sixes, scored 70 runs and chased the target of 138 runs in the 15th over

KKR beat Punjab by 6 wickets: Russell turned the tide with 8 sixes, scored 70 runs and chased the target of 138 runs in the 15th over

Overview The 8th match of yesterday's IPL tournament was played between Punjab Kings and Kolkata…

6 months ago