4 Simple Ways To Improve Your Credit Score Before Applying For A Personal Loan
According to CIBIL, almost 90% of loans sanctioned are to those customers who have a minimum credit score of 750.
Your CIBIL score plays a crucial role when you apply for unsecured loans as it vouches for your creditworthiness. A high score makes you more eligible for the loan. Similarly, your application may get rejected if you apply with a low score.
Hence, you have to improve your credit score before opting for a personal loan. Some of the ways how you can do the same are mentioned below.
- Pay Dues in Time
Paying your loan EMIs and credit card debt in time has a positive impact on your credit score.
Opt for ECS or standing instruction to connect your savings account and loan account. Doing so automates EMIs payments and helps you avoid missing on deadlines.
Make sure you pay the total payable amount and not the minimum payment due when paying your credit card bill. Paying the latter not only lowers your CIBIL score but also carries forward the majority portion of your total amount due to the next month’s bill.
2. Keep Your Credit Utilization Under Check
Refrain from using more than 30% of your credit limit to improve your credit score. Going overboard with your credit card makes you look credit hungry. Hence, your CIBIL score goes down.
3. Have a Mix of Credit
Keeping a balanced mix of secured and unsecured credit also has a positive impact on your CIBIL score.
4. Don’t Apply For Multiple Credits At The Same Time
Lenders conduct a credit enquiry when you apply for credit. Each such enquiry lowers your CIBIL score. Hence, applying for multiple ones at the same time can lower your score drastically.
You can opt for a secured credit card if you don’t have a CIBIL score. Numerous companies offer credit cards against fixed deposits that can help you improve your credit score before applying for a personal loan.
Read More: 3 Simple Ways to Improve your Credit Score before Applying for a Personal Loan
