If you have ever applied for a loan or a credit card, then you must know what CIBIL score is. Although it is a lot easier today to get small personal loans, home construction loans etc. the significance of CIBIL score is still there. In fact, its importance is increasing by the day. Today, CIBIL score is not just an assessment parameter considered by private and government banks, and other financial institutions, it can also affect your job prospects, as some banks have started making it mandatory for the job seekers to have no history of loan defaulting or a poor CIBIL score.
It can’t be emphasized enough why you must improve credit score as much as possible. Even if your current score is above average you should strive to make it even better. A good CIBIL score can improve your chances of getting a loan or credit card greatly. On the other hand, having a poor score can literally destroy your financial objectives. Here are a few ways how:
- Loan for Low CIBIL Score
One of the biggest problems that a poor credit score can create, is making loans of any kind almost inaccessible. Say, you just married a few weeks back and now you want to enjoy the new phase of your life by purchasing a new house. However, since your score is below average you won’t get a home loan. Even if you did manage to find a lender who is willing to sanction a loan, it is unlikely they are offering low interest home loans. Since you can’t afford to buy a house yourself, you decide to take it nonetheless. This is where the problem starts. Managing finances becomes a nightmare for you soon, as you have to pay huge EMIs every month while taking care of general expenses to run your home. Instead of enjoying your life with your partner you end up spending days under the burden of debt. All this because you didn’t pay attention to your credit score in the past.
- Credit Limits
If you have been a loyal and trusted customer of a bank, they can sometimes take that into consideration and approve a loan despite low credit score. However, this doesn’t mean you can get a loan of any amount. The lower is your score the lower will be the credit limit your bank will be able to offer. Thus, getting a loan won’t be as helpful when you can’t the full amount, or at least an amount that is enough. Say, you want to start a business and since you have been unable to bring in angel investors your bank is your only hope. However, considering your score they are willing to offer only half of the amount that you have applied for. How good will it be to you? Arranging the other half can be almost impossible.
- Credit Card Issues
A poor credit score can also give rise to a number of issues with your credit cards. Not only getting a credit card approved is a challenge in itself in that case, your approved limit will also be low. This can cause a lot of problems for you financially. Credit cards are an easy and convenient way to get credit. They allow you to buy items you can’t afford on EMI basis. However, with a low credit card limit you will have to arrange funds for several items by yourself. Getting supplementary credit cards for your family members can also be a problem.
Your CIBIL score is important. If it has been a while since you took a look at your credit report, then you should get a copy today itself. If your score is not good you can start working on it ASAP. Fortunately, it is not difficult to improve credit score. By merely paying your EMIs on time, limiting the overall credit usage, and rectifying errors and mistakes in your CIBIL report (if there are any) can greatly improve your score. However, if you need expert advice you can also consult a professional company such as CreditSudhaar. They have some of the most experienced credit professionals who can help you improve CIBIL score in the soonest possible time.