If you are looking to place an application for a loan, then your lender is most likely to review your credit score before determining whether it would be provided to you. So, ensure to check your CIBIL score before you apply for a loan. To free checkup, you can hit on the CIBIL score check free online by PAN number option. Also, note that the requirement for CIBIL score varies from one lender to another. So, in the case, you are looking to avail a loan from SBI, then you must ensure to check the SBI CIBIL score to beware if your score is in a match with the lender’s score requirement. If it is, then you can apply for the loan and if it is not then search for any other lender willing to provide you with the loan proceeds at your existing score or improve your score to avail the loan from SBI, if you can wait.
So, from the above it’s clear if you are looking to place an application for a loan, your lender is very likely to review your score before determining it should provide you with the loan. CIBIL score is a three-digit credit score ranging anywhere between 300 and 900 that symbolizes your credibility. If your score is over 750, you can get the best deal provided you mitigate other crucial eligibility parameters. However, if your score is less than 750, your loan deal is likely to have a higher rate of interest. In fact, a low score would convert to a loan application turn down too! So, the question is, how can you enhance your credit score? Read on to understand some important ways through which you can enhance your credit score and be eligible for the loan of your choice.
|CIBIL score table|
|CIBIL score range||Rating|
|Between 750 and 900||Excellent|
|Between 700 and 749||Good|
|Between 650 and 699||Satisfactory|
|Between 550 and 650||Need attention|
|Between 300 and 500||Poor|
How can you enhance your credit score?
You must ensure to keep the following points in mind to enhance your score and enjoy the benefits of holding a high credit score.
Raise al CIBIL disputes
If you view any inaccurate information in your credit report, you require raising it to the bureau for rectification. Doing so will assist you to correct your CIBIL past record and enhance your credit score.
Repay credit card dues timely
You must ensure to repay your outstanding credit card dues timely. Missing out on your due dates or making any late repayments will directly lower your score. Also, it will show your organised approach to financial management. You can consider setting up reminders or enabling an auto repayment option to avoid missing out on your credit repayments.
Restrict credit utilisation
As per the historical data, limiting your credit utilisation to 30 per cent assist you to keep up a good score. In contrast, holding a high CUR (credit utilisation ratio) of over 30 per cent can negatively impact your credit score. Using your credit limit less will prevent you from optimally enhancing your score. You as a credit card user can set your card limit in a manner that can allow you to prevent credit utilisation from rising over 30 per cent.
Check out your credit score often
It is a very common myth that reviewing your credit report periodically can lower your credit score. However, this is just sometimes the scenario. If you as a borrower check your report online through online lending marketplaces, then that is regarded as a soft inquiry, which has no impact on your score. This means such credit inquiries have no impact on your CIBIL score.
On contrary, when credit card issuers conduct any inquiry request from credit bureaus, then that is known as a hard inquiry. Hard inquiries generally happen to lower your credit score, which results in lower eligibility for loans. Frequent hard inquiries may reduce your credit score drastically. Thus, you as a credit card user are suggested to request for a loan infrequently to forgo the possibility of multiple hard inquiries. Doing so can enhance your score.
Keep a constant check on your credit report
If you are making repayment of more than a single debt, then it is crucial for you to keep a thorough check on your credit score record post every repayment. Doing so would assist you to check any discrepancies in your report. Monitoring your credit report periodically will even permit you to report any mistake or error and prevent your credit score from dipping.
Avoid constantly applying for the same loan or card if turned down
Loan applications may be turned down when you as a borrower do not have sufficient funds in your account. Low credit scores can even result in loan turn downs. If you keep on constantly applying for a new loan, this can negatively affect your score. Thus, you must wait and enhance your balance or clear off your outstanding dues for a specific period. Post this, you can start applying for the new loan if you mitigate the eligibility parameters.
Go for distinct credit types
You as a borrower can diversify your credit portfolios too to attain a better score. To do this, you require having the correct balance between unsecured and secured loan options with both short- and long-term tenures. With multiple obligations, you as a borrower must ensure you have sufficient funds to repay for the long repayment tenure after you are done repaying your shorter loans. To maintain a balance, you must ensure to compute your existing liabilities before you apply for a new loan.
Go for a higher repayment tenure when you avail a loan
Opting for a higher repayment tenure on loans assists you to avoid missing the due dates during any monetary crunch. Additionally, owing to their flexible repayment tenure, long-term credit options can assist you to manage well your finances as well as pay conveniently. Thus, selecting a loan with a higher repayment tenure can assist you to enhance your credit score.