- Can I get a fresh loan after clearing My CIBIL issues?
- Yes, you can! But the key lies in knowing what has led to such issues and the solutions you could implement now - Read this post for the same
Yes, you can! Once your CIBIL Score goes past 750, a gold standard in credit scores, lenders will start offering you new loans based on your income and repayment potential. CIBIL assigns credit scores in the range of 300 to 900 in India. Scores around 750 and above are considered good, while scores below 650 are seen badly by lenders.
A good credit score will lead to high loan amounts at attractive interest rates, helping you fulfill your financial needs. So, you should work on your CIBIL flaws instead of letting those mount worries for you. The quicker you improve your CIBIL score, the faster you could get a fresh loan. In this post, we will check the loans you are likely to get after having a good score. We will also discuss the ways to improve your score so that you could realize your ‘Fresh Loan’ goal. Let’s read on!
Loans That You Can Get After Your CIBIL Score Becomes Good
You will be eligible for unsecured loans such as personal loans when your CIBIL Score goes past 750. Even if your score is below 750 but above 700, some lenders can approve a personal loan. You can even get a car loan with such a score. A poor CIBIL Score does not stop you from taking secured loans such as home loans. But the interest rate can be higher than someone having a good credit score. As a home loan runs for quite a long time, getting higher rates will lead to a massive outflow of interest. This further reinforces the importance of applying for a loan when the credit score is good. Let’s check out how attractive credit offers can be when you apply at that time.
Impressive Loan Amount
Lenders would lend you an impressive loan amount after your CIBIL Score becomes good. They will consider your good credit management skills to do so. But the eventual loan amount will anyways be based on your earnings at the time of application. Since it takes a lot to get your credit score up from the lows, you should not go for a loan amount that you might struggle to pay on time and face the mess once again. Evaluate your needs carefully based on your savings too. Going this way will reduce the loan amount required and the interest payment.
Attractive Interest Rates
Applicants having a good CIBIL Score are often rewarded with attractive interest rates. And it could be no different in your case too. The lower rate will not only keep a lid on the monthly installment but also the overall interest outgo. It will help ensure smooth loan repayment and allow you to build on your good score.
Credit Cards with High Credit Limit & Other Special Features
Banks check the credit history of an applicant before issuing him/her a credit card. When found good, credit cards with high credit limits, exclusive discounts, rewards and cashback on purchases can be offered. Your repayment history would show both good and bad stuff. So, lenders could use their discretion to set your credit limit. In all probability, it will be reasonably high considering your good CIBIL Score now. Besides, the credit card could have impressive reward points, discounts and cashback on your purchases.
How Should You Go About Improving Your CIBIL Score?
The improvement in the CIBIL Score will depend largely on the credit mistakes you have committed. Every mistake has a solution of its own. So, checking the credit report and finding the exact mistake will help you immensely. We have advised solutions to correct some mistakes that reduce the credit score of individuals.
CIBIL Score & Report
A credit report prepared by CIBIL and any other credit bureau contains a host of credit information about a borrower. It details the repayment history of an individual – like the date on which you have made loan or credit card payments, the amount of loan taken or the credit card limit utilized, credit mix (if taken more than one debt), etc.
Since you have a poor CIBIL status, check the credit report for reasons. Predominantly, the poor credit profile can be due to a bad repayment history plagued with loan defaults or delays. Other reasons could be making frequent credit applications, higher weightage of unsecured loans, etc. We have solutions for all. But before that, see below how you can check your credit report.
Check Your CIBIL Report Online
Pulling your credit report from CIBIL will require having an account with the noted credit bureau. You can create your CIBIL Score account by mentioning a few personal details such as your name, PAN Card, residence address, email ID, contact number, etc. Or you can check the CIBIL report at Wishfin, a premier financial marketplace and an official partner of CIBIL. Here are the steps you need to follow to check your CIBIL score at Wishfin.
Account Creation Steps
- Go to the official website of Wishfin and click on ‘CIBIL Score’
- Mention your name as per your PAN Card
- Provide your Date of Birth in the required format, enter your PAN number, and share your Email ID and Contact Number
- Click on ‘Submit’
Your details will be checked, and only after successful verification, your account will get created.
- Go to ‘LOGIN’ in the CIBIL Score page
- Enter your email ID or mobile number
- Input the One-time Password (OTP) received and see your CIBIL Score
Rejig Your Spending Pattern If You’re Going Through a Bad Repayment Experience
If your poor CIBIL Score is due to a massive delay in the loan or credit card payment, making a change to your financial routine can help stem the slide in your credit score. You may find some expenses unnecessary and can be done away with. Also, using some of your savings in fixed deposits and mutual funds won’t be a bad idea either. Paying on time and maintaining it for long can improve your score gradually.
CIBIL Score Worsened Due to Frequent Loan Rejections? Apply Only When Your Credit Score Becomes Good
When you apply for loans frequently, multiple hard credit enquiries are reported in your credit report. If rejections happen after these enquiries, the credit score can fall rapidly. So, applying any further will not be advisable. Look to pay your existing loan or credit card dues on time and improve your score over time. Once the CIBIL Score reaches the desired level, you could apply for a loan. But that may take some time. So, be patient and keep doing the good work to get rewarded later.
Be Patient If You’ve Defaulted on Unsecured Loans
The role of credit mix comes into play when one handles more than one debt. If you have been paying multiple debts with unsecured loans accounting for a major portion of the credit mix, any default committed would decrease the score quite rapidly. In case you have, the CIBIL score will take time to improve.
Arrange the money and pay off the due. If you don’t have enough to clear your dues, you can go for a debt settlement. It is an exercise by which the lender can allow you to pay the reduced amount. You can get relieved from debt obligations after paying the agreed amount. It won’t lead to an excellent score, but will help improve your situation. You can still get a secured credit card or a secured loan.
Solutions to Deal with a Higher Credit Card Utilization Ratio
Irresponsible credit card behaviour by spending more than your repayment capacity could raise the bill way too high for you to pay on time. In case you have fallen into this trap and have missed payments, your poor credit score is not a surprise! Converting your credit card outstanding into EMIs at a lower interest rate of 12-15% will make sense. Other options would be to use your savings or take help from family or friends. Exercise these options fast as a delay here won’t only reduce your credit score further but also pile on the charges.