Within the undefined territory of life, you get to see varied circumstances, some good, some not so. You would be delighted for the good happenings in store while remaining worried over the occurrence of a bad event. But then, you have to deal with those and recover smartly.
One thing that can help you do so is a personal loan, a type of unsecured debt which you can avail to serve purposes such as education, marriage, medical emergencies, etc. However, a poor CIBIL score can be a dampener to meet these needs as lenders can deny a loan if that is the case. Let’s check out the good CIBIL score for personal loan and the ways to get so in this article.
How Much Should You Score to Get an Approval to Personal Loan Application?
As personal loans are offered without requiring an individual to submit a collateral, the interest rates in their case can be higher compared to secured debts. At the same time, lenders make sure the CIBIL score of an individual is 700 and above before giving an approval.
If that touches 750 and beyond, it will be only better. CIBIL, a leading credit bureau in India, provides a score in the range of 300-900 to individuals with a loan or card payment record of 6 months to a year.
How Can You Achieve CIBIL Score of 750 and Above?
Well, if you are looking to get a CIBIL score of 750 and beyond, it clearly means you have a credit history that needs some repair. Be it intentionally or unintentionally, you may have committed errors in your repayment life that’s making it tough for you to get an approval for a personal loan. Here are some of the remedies which you can apply to improve your score and get your loan application approved.
Get Repayment in Perfect Shape – The base of a credit score is formed largely on the kind of repayment you have brought to the fore. Are you late in paying the loan EMIs or card dues? If so, then start paying the same on time to give your score a leg up. With the timely repayment on a regular basis, you can swing the pendulum in your favour as CIBIL would consider raising your score.
Maintain Effective Credit Utilization Ratio – It’s important to maintain a good credit utilization ratio so that your credit history builds with time to reinforce confidence among the bureaus such as CIBIL about your creditworthiness. This phenomenon is associated with a credit card wherein you get a specified limit. Don’t utilize too much or too less as neither of them builds the history. It’s better to have a utilization ratio at 30%-40% of the limit offered.
Avoid Settling the Debts – It’s an easy thing to do when debts pile up. You negotiate with the lender to reduce your debt burden by signing the debt settlement agreement. The debt does reduce with the same but not without a damage to the score that takes a lot of time to improve from there on. So, better bring a discipline to your spends so as to ensure a regular payment instead of going for debt settlement.