Improve CIBIL Score 2024: The CIBIL score is a numerical representation of an individual’s credit history, consisting of three digits. It is derived from the information gathered from the accounts and inquiries sections of the individual’s CIBIL report. The CIBIL score takes into account factors such as the payment status of loan accounts and credit cards, as well as the number of days past due for outstanding amounts.
This score reflects the individual’s creditworthiness and their ability to repay borrowed funds. The range of CIBIL scores is from 300 to 900, with higher scores indicating a better chance of loan approval. It is important to note that different loans have different criteria, and a CIBIL score greater than 750 increases the likelihood of loan sanctioning by 79%. Maintaining a good CIBIL score or Improve CIBIL Score 2024 is crucial as it can also impact future loan applications.
Steps to Improve CIBIL Score 2024
To Improve CIBIL Score 2024, certain steps can be taken:
- Firstly, it is important to review the credit report for any errors or misreporting. If any discrepancies are found, they should be immediately reported to the relevant authority for resolution. This will help in increasing the credit score and making the individual eligible for a personal loan.
- Additionally, when applying for a personal loan with a low CIBIL score, it is advisable to opt for a lower loan amount. Lenders perceive individuals with low CIBIL scores as high-risk borrowers, and requesting a smaller loan amount increases the chances of loan approval.
- Moreover, repaying a lower loan amount is comparatively easier for the borrower. By making it convenient for both the borrower and the lender, the chances of obtaining a personal loan with a low CIBIL score are enhanced.
- Furthermore, providing evidence of income can also work in favor of the loan application. If the individual can demonstrate an increase in salary or additional sources of income despite having a low CIBIL score, presenting proof of income can make the lender more favorable towards granting the personal loan.
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While a low credit score significantly decreases the likelihood of being eligible for a personal loan, there is still a slim possibility of obtaining one. For example, if your CIBIL score is below 600, such as 550, the chances of securing a personal loan are very low. However, if your CIBIL score falls around 650 or 700, certain lenders, primarily NBFCs, may still consider offering you a personal loan. Nevertheless, several factors come into play for this to happen, and you must be aware of them.
How to Improve Cibil Score 2024?
1. Sufficient Disposable Income
If you possess a stable and substantial income source that allows for adequate monthly disposable income to repay your personal loan EMIs promptly and in full, certain lenders may view your application favorably and approve you for a personal loan, despite your low credit score. This criterion may also apply to individuals who lack any credit history and are new to credit.
2. Stable Employment with a Reputable Employer
Individuals employed by renowned corporations, multinational companies, or public sector organizations are perceived to have a higher level of income stability compared to others. Consequently, lenders may consider approving personal loan applications from such applicants, particularly those with a consistent employment history, based on their capacity to repay EMIs, job stability, and the reputation of their employers.
3. Specific NBFCs and Fintech Digital Lenders
Individuals seeking a personal loan with a low credit score should bear in mind that most major banks and NBFCs are unlikely to approve their applications, even if they possess a high disposable income and stable employment. However, there are modern NBFCs and Fintech lenders that cater to individuals with low credit scores, albeit at a higher interest rate.
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Ways to enhance your CIBIL score
Here are some ways to enhance your CIBIL score:
- Ensure timely EMI payments and maintain credit discipline.
- Adjust your credit card limit according to your expenses and keep the credit utilization ratio in check.
- Build a healthy credit mix by having a combination of secured and unsecured loans.
- Maintain a long credit history with prompt repayments to strengthen your score.
- Avoid accumulating excessive debt within a short period.
- Opt for longer repayment tenures to gradually improve your credit score.
- Regularly check your CIBIL report and address any errors by raising a dispute with CIBIL.