Your creditworthiness is quantified by your CIBIL score. The three-digit number falls between 300 and 900. You can be eligible for greater credit card and loan offers if your credit score is 900 or higher. Most lenders, including banks and non-banking loan companies, want a CIBIL score of 750 or above (NBFCs).
Your future contacts with lenders and financial institutions are directly influenced by the Credit Information Bureau India Limited (CIBIL), which controls your credit score. A good credit score can ensure that your loan or credit card application is approved quickly, but a bad credit score will limit your chances now and in the future. We frequently struggle to maintain a respectable credit score because of our ignorance of the subject. We put ourselves in difficult positions due to our ignorance, especially during trying times. Because of this, we at Bajaj Finserv have put together a list of five essential qualities that will help you establish and maintain a solid financial history.
5 ways to maintain up your CIBIL score:
1. Serious Questions
When you apply for a loan or credit card, a hard inquiry informs lenders that you have requested credit elsewhere, for any kind of loan. For about 24 months, hard inquiries leave a trace on your credit report. A thorough credit inquiry reduces your score by five to ten points. Because each inquiry is documented on your credit report, you should thus be careful about the type of credit you apply for as well as how frequently and in how many ways. You can challenge any error on your credit report, even a hard inquiry, if it appears on your report. Your credit score won’t be as negatively impacted if you receive several hard credit inquiries in a short period of time from the same business for various loans. Your credit score may be harmed by inquiries, but it can be fixed over time.
2. High credit use
In addition to late payments, utilising more than 30% of your credit limit might harm your credit score. If you ignore your income and carry on spending, your score could be reduced by a few points.
Customers can use loans and credit cards to buy things that they otherwise wouldn’t be able to afford in whole. On the other hand, making it a habit would only result in a never-ending cycle of debt repayment. By using cash whenever feasible and limiting your use of credit cards, you can reduce the amount of money you spend on credit cards.
3. Late or non-paid payments
Not paying your EMI or credit card account on time is the biggest threat to a decent credit score. Your CIBIL score will suffer if you consistently make late, missed, or skipped payments. Pay the bare minimum to save your credit if you are unable to pay the full amount of the bill. When you take out a personal loan and pay just one EMI each month, you can consolidate your debt if you’re struggling financially and owe money on several credit cards. You may also check your CIBIL score for free using our clever tool for assessing your financial health.
4. Co-applicant or guarantor for a loan
A joint loan with your spouse or offering to be a guarantor for someone who makes timely EMI payments are also wise decisions. If you have a co-applicant or guarantor with a strong repayment history, your credit score will increase. Being in this circumstance is challenging, though, because you will be held accountable if the person defaults in both situations.
5. Defaulting
The worst mistake anyone can do is to go into default on a credit card or loan. Lenders may put you on their blacklist for the rest of your life if you miss any payments. Our mistakes should serve as a springboard for growth. Constant attention and avoiding the mistakes described are necessary for maintaining a good credit score.
It is easy, quick, and hassle-free to apply for an unsecured loan from Bajaj Finserv Markets, such as a personal loan. There’s also more. The entire process is done online, so you may do it at your convenience from home. What are you still holding out for? Put an end to your financial problems by obtaining a personal loan from us right away.
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