A credit company named Credit Information Bureau (India) Limited (CIBIL) maintains all the records of credit-related activities of an individual, companies(private and public sector), trustees, societies, banks, so on and so forth. And this three-digit number in the range of 300-900 mark the eligibility level of the borrower in availing any and all loans.
A personal loan is one among many that expect a reasonably sound score from its applicant.
Credit report :-
A credit report or a CIBIL report
is a lengthy document with the borrower’s history of credits with additional information such as personal information, employee information, and bank statements that the lender looks over with high cautiousness and care.
Factors affecting CIBIL score :-
History of credits: credit history document has the entire report of your monthly instalments and makes up to 35% of the information amounting to the payment of loans and debts.
Public Records :-
This shows the borrower’s past records of the customer’s public record showing any and all delinquency.
Utilization of credits :-
This shows the percentage of loans or debts you have availed in the past and amount to 30% of the report. A good credit utilization per cent should be below 50%.
Credit mixture :-
These criteria report the number of secured and unsecured loans you have availed in the past and values good if any or both types of loan is taken.
New credit :-
Each time one avails a loan, the number of new credit goes up, and it isn’t the best idea to take out multiple loans at once.
How you can improve your credit score?
Some ways to Improve your CIBIL are,
Pay monthly instalments on time :-
Equated Monthly Instalments(EMIs) are essential criteria determining your score. Paying the interest amount goes both ways. On-time payment can considerably increase your score, make you possible for many future loans, and refuse payment can hinder your chances of receiving a loan.
Credit limit customization :-
your credit limit should be minimum. Using much of the credit has the opposite effect in getting you a loan or debt. One can even approach the bank and ask for limiting your credit. Doing this has a possible chance of increasing the CIBIL score.
Long tenure-a good choice :-
If you think and know that paying a high interest amount each month is a hard responsibility, then choosing a long tenure does you greatly, as it reduces the EMI amount and makes it reasonably possible to pay on time without any due diligence.
Multiple loans at once :-
Avoid taking multiple loans at the same time as too many loans mean an increased interest amount. And at times contributing a large part of the income to lenders might be difficult, thereby decreasing your credit score.
CIBIL score and Personal Loan :-
A good credit score is one above 750 and having as high as 900 is an adequate one to avail loans, and is exceptionally fine if the loan is an unsecured one like a personal loan. The Personal Loan Eligibility is available on almost all banks and financial institutes official website that can be checked out by anybody, anywhere. A fine CIBIL score might give you low-interest rates, and a shortage of a good score might make the bank or financial institute charge high-interest rates after the approval of the loan. The loan approval process is fast and neat if you have a well enough credit score. Emergency times could make great use of this. The loan period is another important aspect of a loan, and sometimes people want long tenure or short tenure and availing one you want is widely possible if the score is something the bank or NBFC likes.
Conclusion :-
Canara Bank Personal Loan offers the best rates in the finance market with a large number of customers yearly. And availing of a personal loan is a stress-free, convenient process.
Also read this: From the new session how you should handle the Personal Loan