Higher the credit score the lower are the risks to a quick retail loan. A creditor first looks for your credit score to scan your payment history even before reading your loan application. So, let’s understand what makes up this score and confirm that there is no mishap in those parameters.
CIBIL is one of the four credit bureaus furnishing credit score reports in India. A high CIBIL score can give you quicker approval on credit applications. Not just pre-approved loans, but higher credit card limits with better benefits and cheap interest rates on business and retail loans. Rewards are plenty with a good CIBIL rating based on your CIBIL report.
How To Improve Your Credit Score
To improve a credit score is a marathon and not a sprint. It will take time to brush up the score but is worth the hassle. A below-par score can cost you thousands of dollars if not millions over a lifetime.
Luckily, you’re not alone. A crowd of people struggles to improve their scores, and there are limited yet simple options to set up good credit. Just focus on learning the factors that influence your credit score, and take conscious steps to improve it. Here is a list of tips that will help you improve your credit score to get hold of a quick retail loan.
1. Stay on Top of Payments
Accept to be a responsible debtor. Always pay your bills on time to keep your debts in the green. Your payment history is one of the primary factors CIBIL counts while calculating your credit score. Timely payment history reflects your ability to pay back debts effectively.
Set reminders for EMI payments, to avoid delays that not only cost you a penalty but a non-performance of liability, which also harms your CIBIL score.
A typical CIBIL score ranges between 300 and 900. A score above 800 is excellent credit, but a score below 550 is considered a poor one. A fair score is anything from 550 to 700.
2. Pay off More than Minimum To Access An Easy Retail Loan
Pay more than a minimum of the debt balance to clear your overall debt load faster.
In case of more than one debt balance, it is better to pay a minimum amount on other accounts too. That can help you access an easy retail loan. Plus, you will have multiple benefits on a handy clearance of debt balance on multiple accounts. It will also build a good rapport at the time of the CIBIL score evaluation.
Apply for any extra credit in moderation. Repay one loan before jumping to take another.
3. Clear off Your Debt (Use Your Credit Limit wisely)
The amount of money in debt to the amount of total credit available. Do not store your available credit but don’t wipe it off completely. It is better to have a low credit left with you rather than leaving a chunk of credit unutilized.
The lender too keeps an eye over a borrower’s credit utilization rate. Someone with a high credit utilization rate is less likely to pay back while a low credit utilization rate is likely to have a higher credit score.
4. Keep old Debts on Your Report (High Credit Score)
It is fine to have old debts on your report as long as you have made timely and complete payments. It also applies to your credit card accounts. A debt account paid in full is positive to improve your credit score. A record of timely bill payments in the past offers a creditor more information to test your creditworthiness and can help you access a retail loan easily.
It is better not to shut your unused credit cards to sustain a long credit history. Closing your old credit card accounts can reduce your credit history. However, be wary of the annual fee credit card induces.
The Gist of It
It is better to grab a quick insight on how credit reports and credit scores work to take better control of your credit.
Your credit score won’t shoot up overnight. Retain long-term credit habits to gain an excellent CIBIL score. Be patient and devise a plan that influences your overall financial life. Eventually, you will see your score rising.
Most of the micro and small businesses earlier had no access to any short-term or long-term business funding. Now, there is no more need to find any collateral or finance data trail to access a loan. With Indifi, the best are the chances to find multiple lenders and secure an easy business or retail loan.