Have you ever applied for an instant loan but been constantly rejected due to a low CIBIL score? Many individuals face challenges when it comes to quick loan approvals, as lenders don’t prefer lending money to risky borrowers. Lenders generally prefer to consider the CIBIL score to determine the creditworthiness of an applicant. If you are looking for a personal loan app for self employed, a better credit score helps to achieve quick loan approvals at competitive interest rates and flexible terms and conditions.
This article discusses why a good CIBIL score is necessary and tips to help you boost your score.
Understanding CIBIL Score
The CIBIL score is a credit score between 300 and 900 that summarises an individual’s creditworthiness and history. It helps lenders identify trustworthy applicants. Someone with a good credit score (more than 750) can get an insta personal loan with favourable terms.
Why is a Good Credit Score Necessary?
Before diving deeper, it is essential to understand why having a good credit score is necessary:
- Quick Approvals: Lenders prefer applicants with good credit scores and approve their applications quickly and effortlessly.
- Competitive Interest Rates: A good credit score helps borrowers secure loans at competitive and lower interest rates.
- High Loan Amounts: Lenders may approve your high loan amounts without any hassle if you have a strong credit history.
- Flexible Loan Repayment Tenures: Borrowers with good credit scores get to choose their repayment period based on their financial circumstances.
Tips for Improving CIBIL Score for Instant Loan Approval
Let’s explore some of the effective strategies that can help you improve your credit score:
- Pay Your EMIs and Credit Card Bills on Time: Make sure there are no missing payments for EMIs and your credit card bills, as it will decline your credit score. You can set up auto-payment facilities or reminders to ensure timely payments to improve your score and avoid late payment fees.
- Maintain Low Credit Utilization Ratio: If you want to improve your credit score and need an insta personal loan quickly, use no more than 30% of your credit limit to maintain a low credit utilization ratio and show your financial stability to the lenders. Try to pay off your debts regularly and avoid using credit cards excessively.
- Check Credit Report Regularly: Check your credit report on a regular basis to maintain the right score and take measures wherever necessary. Ensure all the details entered and loan details are correct.
- Avoid Multiple Loan Applications: Do not apply for multiple loans in a short period of time. Doing so can negatively affect your CIBIL score, and lenders may view it as a sign of financial stress. Use trusted personal loan apps for self employed whenever it is necessary.
- Healthy Credit Mix: Having a balanced credit portfolio, meaning you have handled different types of secured and unsecured loans, helps to boost the credit score.
- Repay Your Old Loans: Ensure you repay your old loans effectively and avoid closing your accounts abruptly, as it can negatively impact your score.
Conclusion
Improving your CIBIL score is not an immediate process; it grows gradually as you maintain your profile, pay your EMIs and bills on time, repay your old loans smartly, and maintain a low credit utilization ratio. When applying for an insta personal loan, make sure to use a reputed app, like Bajaj Finserv, that is trusted by many and promises immediate processing, quick approvals, flexible loan tenures and charges no hidden fees.
By following the above tips and maintaining responsible financial habits, you’ll not only improve your credit score but fulfil your financial goals smartly.
