What Factors do Lenders Consider When Approving Loans?

Banks and NBFCs offer all kinds of loans to their customers- personal loans, home loans, business loans, etc. However, irrespective of the nature of a loan or its size, there is always some level of risk when it’s approved by a loan officer. This is why the banks consider several factors when someone applies for a loan. These are:

1. Credit Score

In case you don’t know, getting a loan for low Cibil score can be a herculean task. This is because credit score is the most important thing that a bank checks when it evaluates a loan application.

Your credit score signifies your creditworthiness. So, the higher is the score, the more you are “worthy” of receiving credit. This is because the score itself is calculated on factors like your repayment history, existing debt, credit utilization ratio, etc. If you have paid other loans in the past on time and without defaulting with any, then your score will be high, and it will let the bank know that you can be trusted with a new loan.

If you don’t know what your existing credit score is, then you can download your credit report online which can tell you the score and other important details as well which include your repayment history about loan EMIs and credit card bills, number of loan inquiries made recently, etc. You may also qualify for a free Cibil report if you didn’t download the report this year earlier. This is because as the per the norms of the central bank, all credit rating agencies are required to provide one free report to each user every year.

2. Income

You can’t take a massive loan with EMI of Rs. 30,000, when you are earning 40,000 a month. In other words, your income should be high enough to accommodate the EMIs of the loan you are interested in and also have room for your household expenses. There should be enough margin between the EMI and income so that the bank can have the assurance that you can easily pay the EMIs even if there is a financial emergency and you need to spend a portion of your income for that.

3. Debt-to-Income Ratio

If you are already repaying a loan, then the same is also taken into consideration during the analysis of your loan application through debt-to-income ratio which is self-explanatory. Again, this has to do with basic logic. If you are already paying the EMis of two loans and your income is just high enough to accommodate them and your expenses, then there won’t be room for another EMI. So, a bank won’t approve a loan knowing that you are earning barely enough to get by. You can find all the details regaring this in your free Cibil report.

4. Repayment History

When a bank approves a loan, they want the borrower to pay it back on time. This is because it’s not just about one borrower- there are hundreds of them in their portfolio. This is why if there are a large number of borrowers that delay payments, then it can affect the cash flow of the entire institution. So, the banks check the credit report of applicants to ensure that they have paid most of the EMIs, if not all, on time without delays. This is the reason why it’s so difficult to get a loan for low CIbil score and you have to take personal finance seriously to be financially secure.

5. Assets

If you own assets like stocks, real estate, jewelry, then you can get a loan by offering them as collateral. When you get a loan under this arrangement, then it’s called a secured loan for obvious reasons. In fact, a secured loan is easy to get compared to traditional loans as the bank can sell off the assets in case the borrower is unable to repay the loan. So, it’s easier for them to approve the loans. That said, these loans are risky for the borrowers because if you are unable to pay the loans, then you can lose your prized possessions.

So, these were some of the factors that lenders consider when they check loan applications. Do note that your credit rating is the most important factor here. So, make sure that you increase it as much as possible before you send the application.

Procedure that individuals who maintain a credit score of 750+ follow

There is no doubt that a high or good credit score can make a significant impact to your financial life. It can offer you the best interest rates on loans and get your credit card application approved. In some countries globally, even prospective employers and insurers go through a person’s credit report to determine their creditworthiness. You never know when bagging your dream job is the result of a good credit score!

So, does it mean that there will never be a loan for low CIBIL score? Well, not exactly, but such a loan does not come at the best terms. For instance, you can wind up paying a much higher rate of interest than you would if your score had been higher.

What is a credit score?

We know what a credit score does and how important it is, but let’s take a quick look at what constitutes the credit score, shall we? It is a numerical representation of your credit report, an all-important document generated by a credit bureau. There are currently four credit bureaus in India, each offering a report. A score ranges between 300 and 900, and a higher score is always a plus point.

Lenders consider a score of 750 and above a near-perfect score. This score essentially gives them the comfort of lending to a creditworthy individual and that’s what makes the score so important. How about calling for your free CIBIL report to know where you stand currently?

Factors that determine the credit score

Let’s take a diagrammatic look at the factors which determine the CIBIL score:

Keeping these factors in mind, your next step is to understand how to get a good credit score – and keep it that way.

How to get a good credit score

So, what is it that people who consistently have a high or good score of above 750 do regularly? Is it something drastically different? Here, we clue you in on their habits so that you too can work towards building and maintaining a similar credit score. Read on!

  • Payment history: It is crucial to make timely payments, so once your loan EMI or card statement is due, pay off the amount on or before the due date without fail. Remember that a delayed payment – or one that is skipped entirely – can pull down your score drastically. If you look at it from a lender’s perspective, they would not want to extend further credit to someone who doesn’t manage their existing debt well. So, set up payment reminders or avail of an ECS facility to maintain a clean repayment track record.

  • Manage your credit utilisation: While the credit utilisation limit is calculated across all your accounts and not just on a single credit card, remember that it is prudent to stay well within a utilisation ratio of 30 percent. A higher usage indicates that you could be in a spot or more of financial trouble and are heavily dependent on debt to manage your finances.

  • New credit: Every time you apply for fresh credit, a hard enquiry is made against your CIBIL report. While temporary – say for a few months – each such enquiry will drag your score down a little bit each time. So, ensure that you apply for a fresh line of credit – be it a loan or card – only if you absolutely need it. This also helps you stay away from unnecessarily walking into a debt trap.

  • Old accounts: Like the saying goes, old is gold! But, in this case, only if it is an account you’ve managed well, such as a credit card that has always had good payment history. Even if you don’t use this card at present, don’t close an old, good account. This can add weightage to your credit score.

  • Apply for a credit card: If you’re a first-time entrant to the financial world with no credit history whatsoever until now, this is the time to apply for a credit card. This can be your first step towards building a robust credit history. Do make sure that you pay on time and ideally in full, so that the card proves to be an asset over the long run, as far as your credit score is concerned.

  • Manage a healthy credit mix: When your score is calculated and also when a potential lender looks at this score, they’re happy to see a report that contains a well-balanced mix of all types of credit. This could include both secured and unsecured loans.

Your next steps

Now that you’re aware of what a high credit score can do for you, don’t forget to request for a free CIBIL report at the earliest. To take charge of your financial health it’s important to know just how your credit report fares. Remember that there will likely be a loan for low CIBIL score with some financer offering the option, but that is not the place you want to be.

Take charge of your financial health starting now!

Do banks check the CIBIL score before loan approval? Here’s what you should know!

Your credit score is a huge determining factor when it comes to loan approval. It is one of the first things that a bank or financial institution checks when you approach them, making it an important aspect of your financial life that you just can’t afford to ignore. Of course, your complete profile will also be considered, but do take special care of your score.

A good starting point would be to get a free CIBIL score from the credit bureau so that you know where you stand. This is an especially crucial step prior to loan application. Read on to know more about the credit score, and how it impacts you.

What is a credit score?

A three-digit number between 300 and 900, the credit score is generated by a credit bureau. It is a crisp overview of your credit report, which tells a lender about your creditworthiness. A high or good credit score can open doors in the financial world for you, when it comes to making an application for a loan or credit card. While every lender’s criteria may differ slightly, there is no doubt that a score of 750 and above will make anyone sit up and take notice!

What goes into a credit score?

Wondering what are the parameters at play when it comes to your credit score? Read on to know more!

  • Payment history on past as well as current loans and credit card accounts

  • New credit that you have availed of

  • The length of credit history, i.e. how old your accounts are

  • A credit mix, which consists of various debt products

  • The credit utilisation ratio, which indicates just how much you seem to rely on credit

Other factors that banks consider

In addition to the credit score, banks also consider certain other factors such as your income and the amount you currently owe on existing loans and credit cards. They also look at the amount of loan you have requested for, together with the loan tenure. Whether your application is for a secured or unsecured loan will also have a role to play, especially keeping in mind your income and expenses.

However, here’s why the credit score is important. Say for instance you apply for a personal loan for low CIBIL score. Here, a bank may not reject your application outright because of the other factors being considered. However, a low score may not give a lender the confidence to offer you the best rate of interest since they too need to hedge their bets.

How to improve your credit score

Given the above, you’d agree that it is indeed important to make sure that your credit score is not just high but that it remains that way as well. Here are some crucial tips that should help you on your journey to improve your credit score.

  • Making payments in time: Being late on your credit card and loan payments can pull your score down. The situation is further complicated if you skip making the payment entirely, as this looks alarming from a lender’s perspective.

  • Do not default on loans: Charged off or settled loan and card accounts reflect negatively on your credit report, as do accounts that have gone into collections. Do make sure that you work out a solution to repay existing debt if you don’t want your score to dip drastically as a result of these charges.

  • Maintain old credit cards: Don’t shorten the length of your credit history if you have a good, old card account. If you have maintained it well by ensuring timely payments, this can in fact give your score a boost.

  • Applying for fresh credit: It’s simple, really – if you don’t need a loan or card, don’t apply for one! Not only does it make you look like you’re constantly in need of credit within a short interval, but every such application results in a hard enquiry on your credit report. This impacts the score, albeit temporarily.

  • Apply for a credit card: The above doesn’t hold true if you want to start building a credit score, however! Apply for a new card and be sure to use it prudently – this can instantly help boost your credit score.

  • Check your credit report: At regular intervals, do make sure that you check what’s in your report, because any erroneous or inaccurate information can prove detrimental to your score. Further, you need to make sure that every account mentioned therein belongs to you – protect yourself from identity theft even as you protect your credit score!

In conclusion

It’s important to remember that while a personal loan for low CIBIL score is not impossible, it is also not optimal at the same time. Instead, with some perseverance and patience it is better to improve your credit score.

Start with availing a free CIBIL score from a credit bureau today, so that you can take charge of your financial health confidently, now and well into the future!

Let’s find out interesting facts about credit score that you didn’t know

Credit score itself is an interesting topic. The whole logic, algorithm, how is it calculated, what factors are associated with it. All becomes one big score that is required to check the creditworthiness of an individual when he or she has applied for a loan or credit card to either the banks or the NBFCs (Non-banking Financial Institutions). For the basics, A Credit Score is a three digit number ranging between 300-900. Where 300 is the lowest and 900 is the highest. The score between 750-900 is a good score. Between 600-750 is considered as an average score and anything below 600 is bad.

There are four credit bureaus in India who gives credit scores. CIBIL (Credit Information Bureau India Limited), Experian, Equifax and CRIF Highmark are these four bureaus. These credit bureaus have the authority to access an individual’s credit history as they have the communication channel set with the banks and NBFCs (Non Banking Financial Institutions) who passes the information of when was the loan or a credit was applied to when it was approved to when it was disbursed and finally when they do they start repaying. Any missed or delayed payments, are all recorded and obviously which affect the score!

Payment History, Amount Owed, Credit Mix, Length Of Credit History and New Accounts are the five factors of which the credit score is made! We all know that. We have read many times about these criteria or the parameters and how they can make or break the score. The free CIBIL Score that is offered also helps anyone know the score and a detailed report wherein one can check the mishaps that must have happened if the score has gone low or anything related. But let’s know a few things beyond that. And what are other factors that one can take care too!

The first that comes is the credit utilization ratio:

What is the credit utilization ratio?

If you are a credit card user, you would know that there is a credit limit to the card which is assigned to you. Now, the credit limit given does not necessarily mean that use the whole of it. Practice shows that people who used a maximum 35% to 40% of their credit limit of the credit card, helped them keeping the score batter and on an average increasing the score. The logic is that it shows that the user is not credited hungry and is responsible enough to use some amount of the credit available. In such a case, if your utilization is high, try and get one more card and manage the balance or you can always clear the outstanding and revive the credit limit.

Secured Loans:

Secured loans or secured credits gives the financial institutes an idea that there always is a backup just in case if there is an emergency and you may just not be able to pay off the loan. A Car loan, Gold loan are some such small amount example of loans and secured credit card which is obtained against the FD that is kept to get that credit card are some of few hacks and tricks you can follow to get a better score.

Investing in something and from the interest received, pay the EMIs:

Now, this is one very interesting concept. Say you have X amount of money with you. If you are buying a home or a car or want to go for higher education or maybe send your kids for the education if you are that age, keep that amount as an investment. Take a loan for the work and manage in such a way that from the interest received from that investments, you can pay the EMI of a loan. In such manner, you can have the money safe, invested and with a new loan account, all the factors of the credit score are also covered helping you increase the score!

Follow these simple interesting hacks related to credit score which you probably didn’t know!

Finding a mistake on credit report can be frustrating. Learn How to deal?

The world runs on the basis of information. Information is everything, what makes an individual powerful is information. Similarly, you might be having lots of information about different topics in your life. Some may have information about a new web series to be released or someone might be having information about the latest vehicle which is going on sale next Friday. What makes an individual truly powerful is when the person holds information about finances and how to deal with it. The world revolves around finance and finance is really a vast topic to discuss.

One of the topics which is gaining traction is a credit score. A credit score is nothing but a financial representation of yours in from of your lenders. A good credit score can get you a financial product like a loan or a credit card in no time at all. All you need to do is pull up your free credit report and see how you are doing and keep up the good work. Many a times while checking your report, you see unusual transactions and are in doubt if the transactions are yours? Those transactions can be mistakes done from the credit bureau’s side and you can easily report it and get it fixed.

For a lot of us, we do not have time to check this report and after checking we do not have time to raise a dispute thinking it will be time consuming and frustrating.

Today, we will sight you some simple and easy steps while considering raising a dispute,

  1. Check your credit report from time to time

A lot of us make this mistake of checking our cibil report only when you are applying for a loan or a financial product. You should stop this practice and consider checking your report at least twice a year. You can pull up your report and check it for free and also this would not be considered as a hard inquiry as the report is requested by you.

2. Check and mark up errors on your report

The next thing you do is, if you find any error on your report highlight the same and raise a dispute towards that transaction at the bureau. You will have t make a proper report justifying why you think it is an error from the bureau’s side and attach all the possible transactional details to support your claim.

3. Raise different disputes

If there are multiple errors on the cibil report, raise different disputes for different errors. This way you will have multiple people working on your mandate and can expect your work to be done in an efficient and faster way.

4. Have patience

Once you have raised a dispute, you cannot expect things to happen on a fast pace. Credit bureaus take time to investigate each dispute and it takes a lot of time to reach the conclusion as there are many factors to consider towards the dispute.

5. Don’t take no as an answer

The credit bureaus with taking a lot of time can also come up with a conclusion which will state that the dispute is been barred and the transaction status remain the same. Do not give up; raise a dispute again if you think the judgment is not in your favor.

6. See if the error is been resolved

Even if you have won the dispute, you will have to recheck and monitor if the credit score has gone up after the dispute. It should not show a low cibil score after you have won the dispute.

Credit disputes can be frustrating and takes a lot of time of yours. What’s important here is that you get to raise your credit score and it can help you get a speedy loan when needed.

My credit score is 550. Will bank consider me for a loan against property?

We all make mistakes in life. Due to financial negligence, might be a possibility you have made a mistake too. Imagine, you have overspent your savings and have opted for different loans. At one particular time, you have all the possible loan account running and nowhere to go. You explain this to your friend and he suggests you to go for a loan against property and asks you to consolidate all your debts and pay it off at one go. You like the idea and start the process to opt for a loan against property and get through to a lender who you are comfortable taking a loan from. You submit your application with all the necessary documents attached and wait for a positive confirmation. In the initial process you get a call from the bank and you are informed that the loan plea is been rejected and the reason for the same is that you have a low cibil score of 550. You start wondering, what can you do and start doing some research on credit score and how to enhance it. You get know that the credit score won’t appreciate overnight and it’s a lengthy process.

First of all, you need to understand what is a credit score and what are its ranges and how will it impact the decision of lender on giving you a credit line.

What is a cibil score and what is a good range of it?

A credit score is a graphical representation of how you are doing financially. A good credit score can not only help you with a quick loan, but will also help in many ways you cannot imagine. There are factors which contribute to your score and you will have to maintain a good score if you want to get a credit line in future. The score ranges from 300 to 850, 850 being the magic number where everything comes to you automatically. Anything below 600 is considered to be poor and you will have to struggle a lot for getting things sorted as far as financial product go.

So, the main question here is will you get a loan against property if you happen to have a score of 550?

The answer to this is a yes! You will get a loan for sure but you will have to go through a lot of pain and hassles, do not worry we will provide you a checklist here,

Shop around

The very first thing you do is to do a thorough research on your report and then shop around for loans. Find a Non-banking financial corporation which will fund your loan against property and get your money credited in no time. You will be paying more interest rate as compared to market standards but it will solve your need of the hour.

Make your file strong

Even if you have a bad cibil score, you can still make your file strong by showing your employer reference, adding a co-borrower and so on. Just because this is one type of a secured loan where you will be keeping your property as collateral, there are chances that you will get a loan sanctioned with ease.

Start saving

After the storm is settled, make sure to start saving and try getting the loan closed. If you make the same mistakes which you’ve made in the past, the chances are you may lose your property to the bank and this can be very depressing.

Maintaining a good credit score is never an easy task, you will go through a lot when it comes to maintaining it. The good part is that you can always start fresh and start your building journey from where you left.

How to bring up your CIBIL score to 750 this Holi?

Credit Score. A tricky thing but not rocket science that one can’t understand. let’s understand the basics! A credit score is a three-digit number, ranging between 300-900. A score that is 750 or above is a good score, a score between 600-750 is average and anything below 600 is a bad or a low score.

Why is credit score important?

Almost when we are in the completion of the second decade of the 2000s, majorly the money rollings happen on loans or credits. One applied for a loan, or the credit they want and negotiate on the terms and get the money they want with the interest. Now, when this process works in association with a bank, or an NBFC (Non-Banking Financial Institution), they keep the record of the money landed, and when and how it was repaid! These are the info that goes to credit bureaus and with the algorithms, a credit score is generated. This score gives the idea about the creditworthiness of an individual and how responsible he/she is in handling the credit. And depending on that score, when applied for new credit, it is either approved or rejected. And that is why a credit score is important.

Which are the credit bureaus?

Ever wondered who gives the score or who calculated the score? The answer is the credit bureaus. There are four credit bureaus in India. CIBIL (Credit Information Bureau India Limited) established in 2000 and serving as the pioneer, Equifax, Experian, and CRIF Highmark which came eventually in existence. Since CIBIL was the first bureau, many people address credit score as CIBIL Score. These bureaus have an algorithm based on various parameters that check and gives the credit score.

What are the Parameters of credit score?

1. Payment History: How responsible one has been in handling credits (credit card bills and loan EMIs) and replaying them on time.

2. Amount Owed: How much credit has been taken to date.

3. Length Of Credit History: How Long had one been taking and managing the credit.

4. Credit Mix: A good mix of secured and unsecured credit along with a fixed and revolving type of credit.

5. New Credit: At a regular interval if new credit is applied.

These five parameters are given various percentage weightage by the credit bureaus and by that the score is established. As mentioned earlier, a score is one thing that can make or break the dreams looked for when it comes to applying for a loan and getting is approved! Better or higher the score more are the chances of getting the credit line approved! But, what to do if the score is low?

How to improve CIBIL score?

Let’s say, we have the fastest target of two months, say Holi. Now, considering the five parameters mentioned above, start working on each of them. Payment history, check your score and credit report. See if there are any missed payments, late payments or unclosed accounts. First and foremost work on that. Take a small loan if you have a cash crunch to clear the old debts. This will help in the second parameter. Length of old credits is to be taken care for. The oldest credit card, even if not in use, don’t discontinue. Pay the annual fees and keep it on. Take a loan which is a secured one, say gold or a car loan. Also, mix it with a personal loan. A credit card is also an option and hence a good mix of secured, unsecured and revolving loan with add up to the value. Since you are applying for new credit, this anyway will add to all of this!

Make sure that the credit card utilization ration does not exceeds 40% of your total limit. Do not apply for too many credits. As that may come across credit hungry behavior and will drag the score down!

Just these few moves and you will see the change in your score that will boost up your requirements! What are you waiting for? Start working on them from today!

Find Out Why and How to Start Building a CIBIL Score?

What will you do if you find yourself in a cash crunch one day, and you don’t have any savings left? Chances are that you will apply for a small loan. But do you know that your application can be easily rejected if your CIBIL score is poor?

Your CIBIL score is the most important factor that banks and NBFCs consider when they evaluate your loan application. So, you need a high score if you want a loan, especially at a lower interest rate. This brings us to the main question- how can you improve CIBIL score?

The first thing that you need to understand is that no matter how poor your score is today, you can improve if you are willing to do the work. You may not get the desired results within days, or even weeks. However, if you are committed and take the right steps, then nothing can stop you from building an impressive credit. All you have to do is take the following steps:

1. Check Your Report

The first thing you need to do before you can start working on your CIBIL score is checking your credit report. Only then you can see what your current score is and how much work do you have to do to increase it to a decent level (a score that’s equal or above 750 is considered good).

You can also go through other important details in the report which include personal details, previous loan’s details, repayment history, income, etc. If you see any mistakes in these details, then you can have them corrected which will improve your score.

As per RBI’s norms, you can receive one free CIBIL report every year. Although you can get your report as many times as you want for a small fee. You can check CIBIL’s official website for more details.

2. Start Using a Credit Card

Using a credit card is one of the simplest and most effective ways of improving credit score. This is because when you use a card and pay the bills on time every month, then it builds trust and increases the score. Plus, you can save money too as many credit cards offer perks like cash back offers, discounts, reward points, etc.

3. Checking Credit Utilization

If you are already using a credit card, then check if you are spending more than necessary every month. Ideally, your credit utilization shouldn’t be more than 35%. For instance, if your credit card limit is Rs. 1 lakh, then you shouldn’t spend more than Rs. 35,000 per month as it affects the credit negatively which you can easily verify through a copy of your free CIBIL report.

If you need to spend a lot of money with credit cards every month, then it’s better to get multiple credit cards. This way you can lower your credit utilization without compromising with your spending habits.

4. Get a Joint Loan

Apart from credit cards, small personal loans and home loans also help in building a credit score. Although you should try to get a loan all by yourself, if you are having trouble with that, then you can get a joint loan instead.

When you apply for a loan with a co-applicant, especially if they have a good credit history, then it’s easier to get a loan. However, the benefit of repayment in terms of credit score is shared equally between the borrowers. So, when you take a loan with someone who has a good credit, then you can improve CIBIL score along with them using their merit.

So, there you have it- some of the most recommended tricks that you can use to build credit. However, there are a few other things that you should keep in mind. For instance, you should never become a loan guarantor for someone who you don’t fully trust even if they are a family member. This is because if they fail to repay their debt, then you can greatly hurt your own credit score. Also, never underestimate the consequences of late payments. Whether it’s credit card bills or loan EMIs, every single payment should be made on time if you want to improve your score faster. Good luck!

How To Update Your CIBIL Score Online

By now it is evident that what is the importance of your credit score and credit report. There are four bureaus in India, viz. CIBIL (Credit Information Bureau India Limited), Experian, Equifax, CRIF HighMark. These are the four bureaus that offer credit report and score of any individual. Now as well know that score is made up of 5 parameters: payment history, an amount owed, new credit accounts, account length and the mix of credits; different bureaus have different algorithms to check an individual’s score. A report, however, is the detailed information of how the score is made, and various transactions associated with an individual.

As CIBIL was the first bureau that was established in India in association with TransUnion, many people may consider credit score as CIBIL score and credit report as CIBIL Report. The score ranges from 300 to 900, where 300 is considered the lowest and 900 is considered highest. Any score that is 750 or above is a good credit score. The benefit of having a 750 or more score is getting the loan or the credit application approved easily with better interest rates. A score ranging from 600 to 750 is average and would take more efforts in getting loans and credits approved but with a higher rate of interest on them. And for anyone with a score below 600, it is nearly impossible to attain any credit. When the score is low, the most priority is to to get it to 750 level. Also, these days, a score is not just a measure of getting a loan and interest rate easily but it is a credibility score for many places. It is checked for jobs, visa applications, important study locations. Your score shows your responsibility towards the finances and how efficient are you in handling them!

So when you are planning to increase your CIBIL score, what would you do? As the parameters are explained, you have to work closely towards all the factors. First of all, start repaying all the debts and clear the old mess. Also, take a close look at the report. At times, it may happen that the transactions that make your score low, are not made by you. So, there is either fraud or identity theft that has happened with your account or using your information or some of the details are wrongly updated. What to do in such case? CIBIL has a dispute raising method online.

Go to the website and raise a dispute with the bureau. They would check the application and verify the error. Once it is they cross verify and check the issues, you score would be updated and unwanted data will be removed from the report.

This is the case when a dispute is to be raised, but what if one wants to update the cibil score online? Well, when you make any credit or related transaction, the information within a few weeks is passed to the bureaus. For example, you have applied for a car loan and a bank is processing it. So, first of all, it is reflected in the report as the hard inquiry. Once the loan is approved and the transaction starts, with all the EMIS which you pay including the down payment, the information is updated in the report. The banks and the NBFCs have to pass this information to the bureaus. Sometimes it may happen that some information is not updated in a particular report of the bureau, but do not feel hesitant to connect to the bureau and send an application to update that particular update which is missed. Banks at a time may miss passing the information.

So, there is no specific method to be followed when the score is to update in the report over the internet in normal norms, but yes, while dispute; do not waste time. Make sure you fill the form and raise it online as soon as you can.

What error  you  can  avoid while  building a credit score

A good credit score can be the ultimate key you can hold to unlock the best financial opportunities in life. Not only a good credit score can help you with various loans and credit cards, it can also help you land on your dream job. It can act like a boost when your future landlord conducts background verification on you. A good credit score can help you in many ways you cannot imagine.

What many of us do not know is that, building a credit score is equally hard as maintain the score. Unfortunately for many people who were starting on this epic credit journey a decade ago had no idea on how to start and how to dodge the blind spots when it comes to credit scores. Fortunately, today you have all the information you need at your finger tips when it comes to starting your journey to build a good cibil score. You have different websites as well, which helps you with free cibil score check to make better credit decisions. With all the information you need, are you still confused? Are you not getting the right gateway to start your credit journey? Are you still on the grey when it comes to identifying the blind spots of credit report?

Today we will help you understand and avoid the most common errors and also tips to build your credit score,

Apply for a credit card

What better way to start your credit journey other than having a credit card in hand. A credit card is one type of unsecured loan which you can use. You will have to make the payment of the credit limit used within 50 days of time. A credit card if managed properly can help you with financial marvels like reward points, add-on cards; you can even apply for another credit card on the basis of your primary one. On the other hand, if you default any payment, you can take a serious hit on the cibil score which will stay on your report for at least seven years.

Apply for a consumer durable loan

If you are denied a credit card because of no credit score, you can apply for a consumer durable loan. A consumer durable loan is the best and easiest way to enter the credit world and it can also help you build your credit. There are a lot of vendors who are entering the consumer durable market as the market has potential. When purchasing a product, you have multiple choices when it comes to lending options.

Avoid getting into debt

Once you open a bank account and start transacting on the same, you are on the financial radar. You will receive a lot of calls from different company’s telesales department who will offer you various loan options. Avoid them and take a loan only if needed. Just because you have an attractive offer in hand, does not mean you will have to take a loan. Many people make such mistakes and end up being in debts. A healthy tip would be to avoid such calls and if needed a loan contact your primary bank branch for loan options. Some banks provide you pre-approved loan options towards your account considering your financial transactions.

Be patient

As we all know, Rome was not build in a day. Similarly you cannot expect your cibil score to go up in a very short span of time. You will have to be patient and gradually see your score go up. Like explained in the earlier point, you can opt for credit cards and other financial options to get your score up eventually.

If you are still not sure on how to start building your credit score, you can always seek professional help. There are companies dedicated for such tasks which can help you build a healthy score for future financial transactions. No process is hard if you know how the process works, be educated about credit facts and start your credit building journey with ease.