Founded back in the year 2000, CIBIL is the most trusted and the first credit information company in India. A part of consumer credit reporting agency TransUnion, CIBIL holds credit records of about 32 million businesses and around 600 million personnel.
What is the CIBIL Score?
CIBIL Score refers to a mark that individuals gain against his/her name depending on one’s capability to pay disbursed loan amounts successfully & within time. Owing to CIBIL’s superior accuracy in determining one’s credit score, all banks and NBFCs look for it in self-employed and salaried individuals.
This score helps them evaluate the financial position of an individual and whether there involves a potential risk of lending them.
What Does the Score Comprise?
There includes various factors that determine an individual’s score, these include:
- Loan history
- Credit card history.
- Outstanding Debts.
- Types of loans taken.
- The number of loans taken.
All of these factors contribute to determining an individual’s credit score, which varies from 300 to 900. A good credit score differs for every bank and NBFC; however, one above 700 is considered standard.
How to achieve such a score?
If you are asking – how to improve CIBIL Score, then you will be happy to learn that there exists several ways.
- Checking your score regularly can help you keep your credit in tab and stay informed about the same.
- Repaying your instalments and EMIs on time can improve your CIBIL Score.
- Avoiding maxing out your credit card limits is also another way to increase the score.
- Paying the full credit amount instead of the minimum can help one to improve this score.
- Ensure that you don’t apply to several banks or NBFCs for credit at the same time.
- Also, make sure that the number of loans remain minimal.
- Stop applying for credit with other financial institutions, if once rejected.
The steps mentioned above were some of the ways answering the question, ‘how to improve CIBIL Score’. Borrowers go all the way to use these methods in increasing their score and their credibility. To ensure that they can be in a position to apply for a business loan in the future, they always keep a high score.
With a high credit score, you will also be eligible for not only a business loan but also the following:
- Credit Cards
Want to apply for a credit card? Increase your CIBIL Score.
Banks and NBFCs will get all the details of your credit history when they check your score. If you have maintained a good track record, it will get reflected in the report. This will make it easier to get a credit card even you didn’t have one before.
- Rapid loan disbursal
In addition to aiding in getting a business loan, a good credit score will also help you in receiving it at the earliest. Lenders look for creditworthiness in a borrower, and that’s what the score vouches for. If banks or NBFCs find it complacent, they will approve the loan as quickly as possible.
Compared to banks, NBFCs can disburse an amount within 24 hours to your bank account. Moreover, the latter also offers various features and facilities to their pre-existing customers.
- Reduced interest rates
When you answer the question – ‘how to improve CIBIL Score’ successfully, you will automatically be subject to lower loan interest rates.
When you increase your credit score, you will get the option to negotiate the rates of interest with your lender.Owing to the reasons mentioned above, CIBIL Score holds considerable importance in the financial world. NBFCs like Bajaj Finserv can deliver you with a business loan efficiently if you have an impressive score. Moreover, they also offer pre approved offers to existing customers as an additional feature.