Personal Loan is an unsecured service in which you can avail of financial assistance from the banks to fulfil your personal needs. Nowadays, Personal Loan is easily accessible as almost all lending institutions provide this service. You need to know the importance of the CIBIL score for a personal loan. But there are some factors on which it depends. And, a Credit score is a major factor amongst them. Thus, If you have a good credit score, you will get a personal loan very easily. Otherwise, you might have some problems getting a personal loan due to the CIBIL Score for Personal Loan. So nowadays, CIBIL Score for Personal Loan is essential.
What is a Credit Score?
To initiate, a Credit score is basically a measure of the behaviour of a customer’s banking. That is, it records the financial activity of a person. If you have paid your debts in time and your banking record is healthy, your Cibil Score will be good. Or else, CIBIL Score for Personal Loan will below. This powerful three-digit number ranges between 300-900. Hence, To fall under the excellent Credit Score category, Your CIBIL Score for Personal Loans be greater than 750.
What is Zero Credit History?
First, the applicants who have never had a loan or credit card before have Zero Credit History. Such an applicant has a Credit Score of either 0 or -1 by default. In such a case, the banks and NBFC’s cannot get an insight into the ability of the loan seekers to repay the loan amount. Therefore, such applicants are generally denied due to CIBIL Score for Personal Loan. If you want to improve the chances of getting a loan, you should build or improve your Credit Score.
Ways to Increase Your Credit Score through Personal Loan
- Avoid Simultaneous Applications– First of all, if you apply simultaneously for a Personal Loan in different banks, your CIBIL score will decrease because each time you inquire about your CIBIL, it gets decreased by 2 points.
- Amount of Loan- Also, it is significant to avail a practical amount of Personal loan to increase your CIBIL score. Because, if by any chance you are not able to repay the amount of loan, your CIBIL Score will be further affected negatively.
- EMI’s Repayment –Furthermore, You should always repay your EMI’s of Personal Loan on time as it is a considerate factor that affects your credit history in the long run. So always pay your EMI’s properly to increase your credit score.
- Lower your credit usage –In addition, Always try to keep the usage of your credit less. Doing this will also help you to increase your credit score. Thus, try to use 50-60% of your salary to maintain a good credit history.
- Multiple debts –Moreover, do not take too many loans at a time. This can convey a hungry credit behaviour to the banks, further decreasing your chance of getting approval.
- Avoid Foreclosure of a Loan – Finally, Try not to close your loans before time. Even if you have money to close your loan, it is better to continue the loan for the entire tenure to improve your Credit Score.
Avail your Personal Loan needs with Dialabank