Finance

How A Low Cibil Score Can Affect Your Loan Application

 

Many adverse effects can result from having bad credit. Late fees won’t likely be your only issue if you have a pattern of paying your bills after the due date. Your credit will be damaged by lousy borrowing practices, making it much harder for you to get approved loans online. Obtaining a cellphone contract or even specific jobs may take time. Just a few possible outcomes are listed below.  

Most lenders and card issuers take the applicant’s CIBIL score in consideration when approving an advance loan or credit card application. One of the four credit bureaus in India that creates your credit score is Transunion CIBIL, which is also the source of this CIBIL score. Getting your credit card or loan application approved typically depends on having a credit score above 750. You will find it difficult to access credit if your score is below 750 door mar

The EMI loan will probably be higher even if your application is accepted. A bank or NBFC is also very unlikely to approve your application for a credit card if your CIBIL score is below 650. The likelihood is that your credit score would be low if you have not handled your credit responsibly in the past (which indicates that you have poor creditworthiness). Most preferred lenders or credit card companies will only approve your loan application if your credit score is high. However, you can improve your CIBIL score by using some best practices if you know the causes of your low score. Continue reading to learn the best ways to get a loan with a low CIBIL score.

  • Even though you may have a bad credit rating, a raise in pay or perhaps a new source of income can help the lender more favorably consider your salary loan application. Additionally, your loan’s likelihood of being approved rises if you provide proof that you have a stable job with a consistent income stream. Keep in mind that a higher interest rate might apply to you.  
  • If you request a significant travel loan with a low CIBIL score, your lender might view you as a high-risk applicant. Your likelihood of failing to repay the loan is higher from the lender’s perspective. Lenders may be more likely to approve loan requests if the personal loan request is for a smaller amount. It will also be much simpler to repay a smaller sum. 
  • A co-applicant or guarantor with a high credit score can help you get a personal loan more quickly if you have a low CIBIL score. Assume the KYC procedures are followed, and the necessary forms are signed with the consent of your co-applicant or guarantor. It helps to get a better deal when the lender sees a co-applicant or guarantor with an excellent CIBIL score on your loan application. 
  • If your CIBIL score is low, you might have trouble obtaining a personal loan. That typically occurs as a result of outdated information on your record. Make sure to notify the appropriate authorities of any errors and have them fixed as soon as possible. Ultimately, improving your credit score will also benefit you, making you a more desirable candidate for personal loans.