Are you looking to secure a loan? If yes, then you may want to check credit history.
What is credit history and CIBIL score?
Credit history is a report where a borrower’s responsible repayment of debts is demonstrated systematically. It gives details into their types of credit accounts, the amount owed, amount of credit used, number of credit enquiries and whether bills are paid on time.
CIBIL score is a number ranging from 300 to 900 that offers a snapshot of an individual’s credit behaviour by analysing factors like an application of credit, repayment history and credit history. Banks use this score to approve loans and to anticipate a possible default in the future.
Importance of CIBIL score
A CIBIL score is an indicator of how disciplined are your credit management habits. Lenders use this number to understand whether you are worthy of a loan or not. This score also fastens the process of getting finance approved and also helps the borrower in getting the benefit of reduced interest rates.
Since the lender trusts you with repayment, they would willingly offer a comfortable loan tenure. This means that the borrower can pay smaller amounts as their EMI, thus saving themselves from encountering a tight financial situation. Nowadays, to know your CIBIL score, check online free!
Additional Read: All you Need to Know About CIBIL Score
Maintaining a good CIBIL score
Here are a few tips to ensure you maintain a healthy CIBIL score.
- Clean repayment record – Timely payment of loan EMIs positively impacts your credit score.
- Monitoring credit history – Monitoring the score and credit report regularly can help you understand your future loan eligibility.
- A healthy mix of credit – The lesser number of unsecured loans you have, the better your CIBIL score.
- Applying for new credit – Continuously exceeding the need for credit in terms of too many loan applications can be a warning signal that can hurt your credit score.
Factors affecting CIBIL score negatively
Are you wondering what affects your CIBIL score negatively? Take a look.
- Credit repayment history – Any default on your loan would be looked into carefully and would badly impact your CIBIL score.
- Higher unsecured loans – It is essential to have a healthy mix of secured and unsecured loans without it being skewed towards unsecured.
- Increase in the credit limit – Higher credit limit demonstrates your debt burden, which would negatively impact your score.
- Many loan applications – Too many applications can look like you are credit hungry and would also demonstrate your loan burden, gaining negative points.
Additional Read: Myths Related To CIBIL Score
Today, keeping track of CIBIL score and reports are easier as you can conduct an online CIBIL check, to thoroughly prepare yourself before making a loan request.
Do you have a decent score and are looking for a loan? If so, then reach out to Tata capital. We offer all types of loans like home loan, personal loan, business loan, bike loan etc. at attractive interest rates, flexible repayment terms and minimal documentation.
So, what are you waiting for? Get in touch with us by logging on to our website or giving us a call today!