Importance of CIBIL Score and How
To Check CIBIL Score
It could seem like a
daunting and difficult task to apply for any kind of loan and people do not
want to opt for it because they do not want to get into the long term financial
commitment of loan repayment through the EMIs each month.
Those who do not have
sufficiently high income fear this all the more when in reality, loans are
meant to sort this very problem. A lot of factors are taken into account when a
lender decides to approve a loan and one of them is the CIBIL score.
The CIBIL score denotes the credit score of an
individual and it is important to check credit
score before one applies for the loan. A poor credit score will
just be a reflection of poor financial history and the loan application could
be rejected.
If this keeps on happening over a period of time, then the credit
score dips even further and it might become really difficult to get approved
for the loan in future. Hence, one should start working on the score if one already
has plans to apply for a loan in future.
Although different creditors
would have different criteria for the CIBIL score, a score of 700 and above
will induce many creditors to look into your loan application as it is
considered quite a strong score. If the score is, on the other hand, below 600,
then it would be a good idea to work towards it and improve the score and then
apply.
One can keep a few things in mind, like lowering the credit card debts
and clearing up any default payments all of which can lead to a debt trap.
Not clearing up unpaid bills
is definitely one of the detrimental factors that can lead to a poor CIBIL
score. Of course, some borrowers have a long standing working relationship with
their lenders and a sudden dip in the score can be overlooked.
However, such
scenarios are rare and it is important for small businessmen not to let their
score dip beyond a certain point. To improve CIBIL score in case it is very
poor, one can also consult a professional about how to turn around one’s
finances and it is important to stick to the advice he offers.
Apart from securing the
loan, checking one’s own CIBIL score from time to time will also give an
individual a sound knowledge of understanding one’s own finances.
There are
cases where a passionate businessman, who has the zest for business, but not
the financial knowhow, often rush into financial decisions and then pay the
penalties of not being able to keep up with the payments.
Such scenarios could
be avoided if only one knew better about one’s own finances.
The
credit rating of an individual is something that will be a constant companion
and anyone who is applying for any kind of loan will always be in need of this
score. Mostly the creditors will themselves acquire all the necessary data
about the credit score from the CIBIL, but one can also apply to check one’s
own score.
For this, they can easily contact their bank to provide it for them
or one could also apply at CIBIL and get the score in turn for a very small
fee. Checking the score from time to time will help one to have better control
over their finances and this will go a long way in preventing someone from
making bad financial moves.
To check CIBIL score
one can log into the official CIBIL website and register with details.
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