5 Ways to Boost Cibil Scores Before Applying For a Loan
If you are going to apply for a loan, be ready because, this time, your lender will take a long look at your Cibil scores. Credit score plays a vital role in the terms the lender offers.
If you have bad credit, then the possibility of struggling to get the loan approved is maximum. Even if you have fair credit, you may have to struggle hard. This time, one can think how to calculate a credit score. So, here I am providing the score that will determine your Credit.
740 or higher = excellent
661 to 739 = good
601 to 660 = fair
501 to 600 = poor
500 or lower = bad
Now, coming to the point, boosting your Cibil score before you apply for a loan can help you to get a better Interest rate.
Check for Errors
An error does not become a mistake until you refuse to correct it. Errors in your Cibil score report can become big mistakes if you do not rectify them in time. Whenever, you get Cibil report, do not just see the score, and also check the error.
Some errors such as the error in your personal information will defiantly have no costly impact on your Credit, but some errors are big enough to damage the credit score. You find any errors then ask to credit bureaus to either remove or correct those. The credit bureau has only 30 days to investigate the errors. So, after 30 days (maximum) your report will be free from the error that is due to Credit Bureaus. Of course, it is an excellent decision to apply for a loan with the free error report.
Pay Down Credit Card Debt
This time, you should be familiar with the fact that credit card debt has weight heavily on Credit. Paying down all the credit card debt can boost your Cibil scores. Not only I even other experts suggest you to keep your credit card debt at no more than 10% to 30% of your current credit limit. Even, you get surprised that lenders will check your Credit card debt when you apply for a loan.
Ask for Forgiveness
One late payment is sufficient to drag down your credit scores. If you have any black mark in the report due to late payment, then you have no need to worry too much. You have to ask creditors to remove this black spot from your credit history. But, keep in mind, if you have numbers of late payment in the history then, the creditor can refuse to clear them. It is a wise decision to keep credit history spotless before applying for a loan.
Keep Your Old Accounts Open
If you are working on improving your Cibil scores before you apply for a loan, you might be tempted to cut up your old or unused credit cards and close the accounts. Do not take this step! Not only I even almost all the expert will advise you to neither open nor close any accounts six months before applying for a loan.
Pay on Time & Every Time
Keep in mind that every timely payment you make will be add in the positive history on your Cibil report. Try to pay all of the bills on time each month. It will impart good impression when you apply for a loan. Even, if your history have late or miss payment mark, then over the time, your history will be improved.