Best Ways to Improve Your CIBIL Score for Loan Application

CIBIL Score plays a vital role in extending the credit to the individuals. But have you ever wondered what to look out in CIBIL report and why CIBIL score gets reduced or increased? Well, the article provides you a detailed insight into the same.

What to look out in a CIBIL report?

Free CIBIL Score-The free CIBIL score ascertains your likelihood of repaying the loan. If your score is 300 or less than 400, it means your creditworthiness is low and banks will be hesitant to offer the loans to you.

You can request for the credit report from CIBIL once in each year by visiting to its official website. CIBIL Score Log in will send you the credit reports within 24 on the email address prescribed by you.

If your credit score is in between 650-699, you are considered as a moderately risky individual. If you have a score of 700-750 that means you will probably get a loan from banks or an NBFC at an attractive interest rate.  Credit scores above 750-799 are considered as good and you will not face any difficulty in getting the loan.

What impacts your CIBIL Score?

If you want to take a loan to expand your business operations or a personal loan, it is important to know what your credit score is and how to improve it. There are various factors that contribute to your low credit score:

Default in previous Loan Payments has a material impact on your credit score

Unsecured Loans – a high percentage of Unsecured Loans in your kitty affects your credit score negatively. Many banks consider it as a sign of financial mismanagement and they are cautious of extending a loan to such credit hungry persons. But if you have more secured loans, the credit score is likely to be positive.

Applying for too many credit cards in a short time period hampers your credit score. For example, if you suddenly apply for several credit cards, it is but natural that your credit score would go down because there is no payment history associated with it. Another factor that negatively impacts the credit score is default payments (the payments that credit card holder don’t make on the due date.)

The best way to improve your credit score or to make your loan application accepted is to take a look on the payment history, number and type of loan account that you have, credit history, outstanding debt and other factors.