Credit scores in India are known as the CIBIL (Credit Information Bureau India Ltd) Transunion score. It is a 3-digit numeric summary of your credit history, rating and report. It is with this that lenders see how much credit you have taken in the past
Credit scores in India are known as the CIBIL (Credit Information Bureau India Ltd) Transunion score. It is a 3-digit numeric summary of your credit history, rating and report. It is with this that lenders see how much credit you have taken in the past and how you were able to repay it and then decide to grant you a loan or not.
Lending a loan is a risky job and is pretty unsecured if the applicant has no credible assets beforehand. There is a common misconception that if you have a low CIBIL score, you cannot apply for a loan. While it is true that a low CIBIL score makes it difficult applying for a loan but it is definitely possible.
- Don’t ask for a humongous loan:Though you might need a huge sum of money but with a low CIBIL score, the lender might not feel secure. So apply for smaller amounts, keep repaying them on time and in this process keep improving your CIBIL score so you can apply for more sum the next time onwards.
- Don’t apply alone:Involving a co-applicant or guarantor makes the process of applying for a loan easier if the other person has a steady income and a better CIBIL score. The co-applicant just has to fulfill some KYC formalities and signatures.
- Don’t claim big:Properly convey to your lender that even if your credit score is low, still you have a steady income from your business which will allow you to repay installments in time.
- Request for NA or NH consideration:The NH or The NA in your credit report shows the absence of any credit activity or simply the absence of credit in the past thirty six months the reason for your low credit score; credit inactivity. In such case the lender might lend your money at a higher interest rate.
So these are some considerations to keep in mind if you want to apply for a loan despite low credit score.
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