Does Credit Score Affect Lender’s Decision?
While applying for a personal loan your credit score plays an imperative role. The reason being a personal loan is an unsecured loan. It is based on your capability to return the loan. It means that it is based on the income and the credit history of the applicant. In case your income is enough and your credit history is also good then you can easily get a personal loan. Let us discuss a credit score first.
A credit score is the measure of the credit history of the customer. It shows how good are you with your debts. CIBIL (Credit Information Bureau India Limited) is a company that takes care of all the records of the debts of the customer. It doesn’t matter that you are getting a personal loan from any bank or non-banking financial company, CIBIL will have a record of it.
So if you do not deal properly with your debts then it will impact your CIBIL score negatively and if is you are punctual with your debts then your CIBIL score or credit score will be affected positively. It ranges from 300 to 900. The more the better, if your credit score is more than 720 you will get a personal loan easily. Otherwise, you will have a problem in getting a personal loan.
Does it affect Lender’s Decision?
Yes, the Lender’s Decision is affected by credit score because a personal loan is entirely based on the credit history and the income of the applicant. If your credit score is good it means that you are very disciplined towards your debts, you pay your debts on time.
It is a safety for the lender that you can return the loan on time. On the other hand, if your credit score is not good it means you don’t pay your debts (credit card bills and loans) properly. So they can refuse to provide you a personal loan. or they may give you very less amount of loans. so always try to pay your credit card bills and debts on time.
How to Increase Your Credit Score?
Unfortunately, if your credit score has receded then you can improve it. A personal loan is the best way to improve your credit score. if you get a personal loan and pay it sincerely than your credit score will get an increase. Pay your EMI’s on time and your credit score will be fine again because the credit score matters a lot in a personal loan and your financial life.
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