Personal loans are needed for many reasons. These include debt repayment, medical emergencies, financial problem mitigation, and so on. Although personal loans can be used for anything, the chances of getting them approved are slim. Several factors govern the approval rate of personal loans. One of the most important factors is your CIBIL score for personal loan.
Many people are unaware of the importance of a CIBIL score for personal loan. They don’t know their minimum CIBIL score for personal loan. As a result, they either get behind in improving their score or fail to pay attention to them. This results in their loan application being rejected. Read further if you do not want such things to happen with your loan application. In this article, we have described the ways to improve your overall CIBIL score for personal loan, and increase your chances of loan approval
Ways to Improve Your CIBIL Score for Personal Loan
Let’s look at some ways to improve your CIBIL score for personal loan:
Timely repayment of credit card dues.
No matter how much credit you have on your card, always pay on time. If you convert the total outstanding into monthly EMI, the credit statement generated will have a due date for that particular month. Try to pay the debt amount as soon as possible.
Missed payments, late payments, and so on will negatively impact your CIBIL score for personal loan. Therefore, you must pay attention to the deadline you have been given for repayment of the credit. It would be best if you kept the unbilled transaction at zero. This will help you avoid any penalty charges or interest on the overall outstanding amount for the particular month.
Limit credit use.
You can use a credit card to purchase anything when you don’t have the required funds. Your credit card can also be used to meet emergencies when you are not eligible for a loan. However, relying entirely on the credit amount granted on the card may negatively affect your CIBIL score for personal loan.
Using a credit card or overspending means that you cannot fulfil the usual purchases, let alone repay debts. If you continue to make purchases on your credit card, the outstanding amount will increase. As a result, the overall interest charge will skyrocket. Therefore, you should limit your credit card usage to improve your CIBIL score. Try to use upfront money as much as possible. Use your credit card only when it is indispensable or you don’t have enough to pay upfront.
Getting more credit cards after careful studies.
Getting new credit cards can also help you increase your CIBIL score for personal loan between 700 and 900. When you have multiple credit cards under your name, you can use them to purchase things without overspending on a single card. As a result, the interest charged on a particular card will be within the nominal rate, which can help you improve your overall credit score.
However, it would help if you went through the terms and conditions, policies, and other details of the credit card and the creditor. This is important, especially if you are looking to improve your CIBIL score for personal loan.
Always keep an eye on the credit report.
You must pay special attention to your credit report to understand whether your efforts are making any difference. You may not be able to see the results immediately, but continuing to apply these strategies will yield results in a couple of months. As you continue to use your credit card or get new credit lines, it will increase your CIBIL score for personal loan.
Keeping an eye on your credit score will help you assess whether everything is under control. At first, it might not sound easy. With practice, you will undoubtedly be able to increase your overall credit score and get your loan application approved.
Be patient and consistent with the process.
Last but not least, you have to be consistent in your efforts to increase your overall credit score. Do not expect to reach your goal after only a couple of days. It will take time to build the credit score. If you give up on your efforts after a couple of weeks of not seeing any results, the chances of your loan application getting approved will never increase.
Always track and monitor your credit score. It helps you understand if the efforts you have put into improving it are working or not. Moreover, this can ensure your CIBIL score reaches above 700 and remains within the higher limit. Do not forget that credit history is equally important as the CIBIL score for personal loan approval.
In this article, we have walked you through improving the overall CIBIL score for personal loan and increasing the chances of getting your loan approved. Try to keep the score above 700 to ensure your loan application never gets rejected. There will be several other roadblocks, but you can easily maintain a high score with a consistent approach. For more articles related to personal loans and other options, check out the Piramal Finance website today.