The good CIBIL score is the key for your loan approval. Credit score will always be the preference of the lender to figure out your creditworthiness. Every lender will check your credit score before approving your loan. The score of your cibil lies between 300 to 900, The score above 750 is the decent CIBIL with which your loan approval will be easy. The CIBIL score impacts on the interest rate of your loans, the higher the CIBIL the high chances of approval with lower interest rates.
The following the 4 things you need to consider for maintaining your decent credit score:
Repayment History will influence your CIBIL score
Be precise in the repayment of your EMI’s and credit card bills. Your Repayment history will impact a CIBIL score. Late and non-regular transaction of repayment will affect your CIBIL Score badly and this will affect the approval for future loan applications.
Multiple Enquires will affect your credit score
Every time you apply for a new loan or credit card, the lenders run an inquiry on your CIBIL report to know your creditworthiness. Too many queries project a negative impression, This will reflect you as a credit greedy person. Never apply for loans with multiple lenders. Multiple enquires will indicate that you credit burden will be high in future and the lenders feel there will be a risk in repayment.
Repeated requests for higher credit limit affect your CIBL. So it is better for you to raise a request when you actually need it.
High Credit Utilization impacts your credit score
Exhausting your credit limit overtime leaves a bad impression to the credit bureau and your CIBIL report will be negative. Over usage of your credit limit regularly and repaying the minimum bills will affect your credit score badly. Consequently, this leaves a thought that you are out of funds and you are considered as a risk, in repayment.
But in case, if your credit utilization is decreasing gradually the repayment burden is low which will boost your CIBIL.
Also Read : How to Improve your CIBIL score
Acting a guarantee will affect your CIBIL score
It may be surprising how one can lose CIBIL score by just being a guarantee. Acting as a guarantee does not directly affect your credit score, but in the case when the person to whom you are acting as a guarantee defaults or delays payment, your credit score will be affected negatively.