Here’s why a Good CIBIL Score is Key to Getting a Personal Loan Quickly!

Are you thinking about taking a personal loan in India? We all know the basic eligibility criteria you must fulfill for a quick personal loan. CIBIL score is the main factor when you are applying for personal loans. Personal loans are usually unsecured loans where you do not need to submit any collateral. Hence, the CIBIL score is the score that represents your financial attitude to your lender.

This blog will make you understand exactly why a good credit score is key to getting a personal loan quickly!

What is a CIBIL Score?

CIBIL score is a three-digit number derived by TransUnion CIBIL Limited for each profile. CIBIL score is prepared based on the data enclosed in the Credit Information Report(CIR).

In simple words, a credit score reflects personal financial behaviour a person is cultivating towards financial responsibilities such as timely repayments, credit mix and credit utilization.

The score helps lenders analyze your creditworthiness.

Credit score ranges are as given below:

800–850 - Excellent

740–799 - Very good

670–739 - Good

580–669 - Fair

300–579 - Poor

How is your credit score determined?

Payment History: Making your repayments on time gives your credit score a great boost. While defaults downgrade your credit score.

Credit Mix: Two major types of credit are secured and unsecured borrowing. The balance you create between both of these types in your profiles is called credit mix. A good credit mix reflects positively on your credit.

Credit Utilization: If you have utilised a high percentage of your credit limit, it shows that you are dependent on credit which negatively impacts your credit score.

How To Get A Personal Loan Without a CIBIL Score?

In case of a bad credit score, you can still get the loan with collateral. The purpose of your credit score is to prove your obedient financial behaviour. A Credit score is a must when you are choosing an unsecured loan that comes without collateral.

While secured loans do not require a good credit score. You can go for a secured loan by keeping your property such as land, a house you own or a commercial property, as collateral and receive your loan amount.

How To Build A Good Credit Score?

1. Pay Your Bills on Time: Around 35% of your credit score is dependent on your on-time repayment frequency. Hence, you are highly likely to positively boost your credit with on-time payments.
2. Keep Monitoring Your Credit Score: Checking your credit score on a regular basis helps you build strategies to push your credit score higher. On some websites, you can even check the next predicted score based on how much outstanding amount you wish to clear while making the next repayment.
3. Limit Credit Inquiries: Each time you apply for a loan or a credit card, the lender will access your credit score. A high number of credit scores being accessed shows a bad impact on your credit report.
4. Set Auto Payment: You can talk to your lender and set up automatic payment. You can choose the date when you want to repay your credit. You will no longer need to manually pay your EMI. Also, you will be free from the worry of making on-time payments.
5. Make Advance Payments: Making advance payments would keep you ahead in this game. Also, when you have already paid your future EMIs, you save yourself from penalties for paying late in case of late payments. The good thing is that you also completed your repayment sooner than expected.

Benefits You Can Get With a Good Credit Score While Applying for a Personal Loan

Good Credit Score, No Need for Collateral

While you are applying for an unsecured loan, your credit score is going to prove your responsible financial behavior to the lender. Hence, only with the support of good credit, you can get a personal loan with ease.

Better Interest Rates

A good credit score automatically opens the door for you to better interest rates.

Credit Cards with Exciting Benefits

Borrowers with good credit scores can apply for a credit card that offers exciting benefits.

Easy Loan Approvals

Lenders prioritize loan profiles with good credit scores because these borrowers are highly likely to repay on time with their excellent financial behaviour. It gives security to the lender who is offering you financial support.

Longer Loan Tenure Approvals

Borrower profiles with good credit scores can also apply for a loan with a longer repayment tenure.

Higher Loan Amounts

As we know, a good credit score is an opportunity to receive many exciting benefits. You can also get quick approval for higher loan amounts with good credit scores.

Conclusion

In conclusion, you should never ignore the impact your credit score can have on your future loan inquiries. Definitely, financial needs can arise anytime without asking. But, if you have always worked hard towards your credit score in your good days, it will be your saviour in your bad days.

Lenditt personal loan app is the top choice of Indians for quick personal loans. With basic criteria such as a good credit score, a stable source of income and age between 21 and 60, you are eligible for Rs. 2 lakh personal loan.

We understand the emergencies that happen without prior notification and your urgent financial needs. Hence, we offer quick loan approval under 15 minutes to our customers. Also, quick loan approval followed by quick loan disbursal is a cherry on top!

Until we meet in our next blog, keep monitoring your credit score!

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