Do you have a low credit score? Tips to increase your score and be ready for credit
Most lenders check the CIBIL score or a credit score assigned by other bureaus when evaluating your credit application. If your score is low, they may be hesitant to offer you credit. Indeed, a low credit rating makes you a high-risk borrower. However, some lenders will offer you credit even if your credit score is less than ideal. For example, a good CIBIL score is considered to be 750 and above, but you can also get a personal loan for a CIBIL score of 550. Sometimes called bad credit loans, these loans are exactly what the name suggests – loans you can get with bad credit.
However, you should exercise caution when applying for a loan for bad credit. Relying too much on these can put you further into debt and hurt your creditworthiness for future needs. It can also make repayment difficult, as these loans usually come with a higher interest rate. To avoid having to resort to a bad credit loan, you can improve your credit score and boost your creditworthiness. Soon you will be eligible for a loan with attractive terms that make borrowing easy and affordable!
Here are some of the best tips to help you improve your credit score and creditworthiness.
Repay dues on time
To boost your credit score, make timely repayment a priority. This will help you create a disciplined balance sheet that strengthens your creditworthiness. Automatic payments and alerts can ensure you don’t miss any of your loan or credit card bill payments. If you have a large debt and you do not have the funds to meet this obligation, consolidate all your debts into one. This eases your task of managing different due dates and makes repayment more manageable.
Check your credit score frequently
Checking your CIBIL score or your credit score at regular intervals is one of the easiest and simplest ways to keep tabs on your credit health. This is an overall rating assigned by rating agencies after taking into account certain key factors. The score is based on a credit report that contains a summary of all these factors and can help you change your habits or decisions to improve your score. Plus, checking the CIBIL score and report helps you spot and report inaccuracies. Since unresolved discrepancies can also hurt your credit score, be proactive.
Limit new apps
Try not to apply for new loans or credit cards multiple times in a short period, as each application will result in a thorough investigation of your credit score by lenders. Too many inquiries in a short period of time can make you look like a high-risk borrower because it involves credit-hungry behavior. So only apply if you meet the lender’s eligibility criteria, need the funds, and have a repayment plan based on your current debt. Also in this regard, checking the CIBIL score regularly is a good way to go. Your credit report contains information about the number of inquiries on your profile, and by viewing this and your current load, you can decide if it’s a good time to apply for new credit.
Keep an eye on your credit limit and its usage
Having too much debt in a short period and using it to the maximum reduces your creditworthiness. So don’t max out your credit cards every month. Likewise, keep an eye on your credit utilization rate, which refers to the total amount of revolving credit you use each month. Although you should strive to maintain this ratio at 30%, start by reducing it to at least 50% to increase your credit score. Here too, checking your CIBIL score at regular intervals can help you better plan your use of credit.
Keep in mind that if you have a low score, getting new credit can become extremely difficult. Although you can get a personal loan for a CIBIL score of 550 or even lower, its terms and fees may not be in your best interest. By checking your CIBIL score before applying for a loan or a new credit card, you can make informed decisions. It also helps in case you want to see how your new improved credit behavior actually improves your score.
CIBIL score verification is easier and faster with the digital services offered by Bajaj Finserv. Here you can check your CIBIL score for free online using your PAN card information and some other basic information such as your mobile number and your monthly salary. With this simple process, you can not only see your credit score, but also get your credit report in minutes. So get started today and get insights to improve your creditworthiness.
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