CIBIL is identified as an essential credit scoring model in India. It generates reports on the basis of your credit score. Lenders approve your loans and other credit products based on your CIBIL score as it determines your creditworthiness. 

Most lenders, such as Vintage Finance and others, classify customers with their CIBIL score. So if your CIBIL score is high, the chances of your loan getting approved are also high. At vintage finance we also offer personal loan for low cibil score.

The components of the CIBIL score 

CIBIL score consists of three main components: credit history, current financial situation, and expected future financial condition. If you have good points in each category, you will also have an excellent CIBIL score. 

The credit history of an individual consists of information regarding their past borrowings. It includes the borrowed amount, terms of the loan, and confirmation of whether the individual repaid it. The current financial situation consists of an individual’s income and spending habits, along with their overall debt. 

Lastly, the expected future financial situation comprises an estimation of the individual’s earnings in the upcoming year and the amount of debt they will be repaying within that period. 

Tips for improving CIBIL score 

Repay dues within their deadline  

Avoid late payment charges and make it a habit to pay your dues on time. Make sure to make the payment of your EMI or credit card bills since they affect your credit score. By paying your dues on time, you can escape from paying excess interest and taxes on your credit card bill. 

Set reminders and get your payment dates organized for settling your outstanding debt. If there are payment delays, you will have to pay the penalty and get a low credit score. Therefore, to improve the CIBIL score, get into the practice of paying your dues on time. 

Maintain a healthy credit mix 

Have a good and healthy credit mix by creating a proper balance between secured and unsecured loans. Under unsecured loans, you can get credit cards and personal loans, while fast loans offer home and auto loans. Focus on something other than getting unsecured loans since lenders prefer those with more secured loans. It will help you to get a good credit rating as well. 

Do not become a joint account holder. 

If you want to enhance your CIBIL score, then avoid being a joint account holder. As a joint account holder, you will have to be responsible for the payment of the other party as well. If they fail to clear their dues and make the payment on time, it will also affect their CIBIL score. 

Avoid taking multiple loans.  

Get into the practice of repaying your loans. It is an excellent habit to repay your current loan entirely before you take another one. The repayment of the current one before taking another will prevent your credit score from getting low. If you take up too many loans, then there are high chances that you will need more funds to repay them together. Therefore, choosing your loan option wisely and boosting your credit score is better.

Choose loans with a long tenure. 

As mentioned before, choose your loans wisely. Go for loan options that offer longer tenure for repayment of the amount. By doing so, you can ensure a low EMI and easily make your payments on time. If you have a long tenure, you will be able to repay your loan easily. You will be able to stay away from the list of defaulters and enhance your CIBIL score. 

Check credit report 

Regularly examining your credit report is a good habit since it will inform you about two critical factors related to your credit score. The first thing about which the report will provide information is your credit or loan defaults. You can comprehend your delayed payments that have influenced your low credit score. 

The other thing about which you will receive information is the recorded credit report. It will help you fix your credit score since you can comprehend the negative aspects, such as defaults and delays in payments. You can approach the bank, correct the situation, and improve your CIBIL score. 

Conclusion

It becomes challenging to arrange money if the lender refuses to avail of your loan because of your CIBIL score. Therefore, you should focus on improving it and avoiding elements that will cause a decrease in the score. 

The credit score can be identified as the single major determinant for availing your loan. So, by following the steps mentioned above, you can quickly improve your CIBIL score and get the best loan options from Vintage Finance.