Credit is always a good way to meet life goals and meet pressing developmental and other familial needs when it comes to working professionals. Loans are available these days for almost everything from traveling to buying cars or bikes and even for purchasing home essentials, gadgets and furniture. There are loans available for meeting medical needs, wedding expenditure, higher education expenses and so on. However, your personal loan application will only be successful if you have a good CIBIL score. We all know that having a good CIBIL score automatically reassures lenders with regard to your credit history.
Here’s How to Improve Credit Score in a Planned Manner-
Before you apply online for a personal loan, you should learn how to improve your credit score. Here are some key pointers
1.) Always understand the concept of credit score thoroughly- While you check eligibility for your personal loan, keep educating yourself about credit score as well. Understand more about the aspects influencing your credit score including utilization of credit, payment history, length of credit history, varied credit accounts and also new credit. Invest time in learning more about credit history and practice the same in order to work out strategies for debt management which will pay off in the long run.
2.)Always choose a secured credit card- Whenever you apply for a secured credit card, that money you possess in any savings account/security deposit is used as collateral. On account of this collateral, secured credit cards have lower interest rates and you are generally required to pay smaller EMIs. This makes secured cards a great solution for establishing a solid credit score and also for building a good credit history.
3.)Always pay utility and mobile bills responsibly- A few lenders will always look at your repayment history in terms of paying utility and mobile bills on time. This is often part of the documents required for the evaluation process. Whenever someone is applying for credit for the very first time, this payment history becomes a vital criterion for determining overall credit worthiness.
4.)Check for any credit profile discrepancies- In case you have hopped to many jobs, you may be considered less credit worthy. You are also considered less credit worthy in case you have a lower salary or work at an organization which is not that well known. These factors may lead to discrepancies in your overall credit profile and may lead to your loan application being rejected.
These point will help you to improve your CIBIL score, and good credit will help you to get a better deal on Personal Loan.
Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Pune, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.