Apart from the income of a person, his CIBIL Credit Information Report (CIR) is the second most important thing, on the basis of which the lending companies consider the loan application of that person. In such a situation, if you are worried that you are not getting a loan due to poor CIBIL score, whether it is a personal loan or a business loan.
Introduction to CIBIL Score
Credit score is an important scale in loan approval. Banks use this to find out the creditworthiness of customers. A score of 750 or more is considered good. When this happens, the loan is easily approved. By the way, it is not easy for many people to maintain a good credit score. Adequate cash flow is necessary for this along with discipline and money-management skills. Only then the loan taken can be repaid in time.
The company Transunion Cibil Limited, determines the CIBIL credit score of any person. It is not that the CIBIL Company personally determines the credit score of such a person. Pre-made procedures and rules are followed to determine the CIBIL score. The rules that determine the CIBIL score will be explained further.
The question arises, can you get a loan despite a bad or low credit score? The answer is yes. One can get a loan even if there is a bad credit history. However, it is advisable to improve the credit score. This will always help you to get a loan according to your terms in the future.
Can I get a loan with a low CIBIL Score?
Here we are telling about six such methods, with the help of which a loan can be approved in spite of low CIBIL score.
1. Increase the scope of search for loans
Different banks and financial institutions also have different methods of evaluating loan applications. Some institutions have a large cut-off in approving loans. At the same time, others also approve it with low credit scores.
Radhika Binani, Chief Product Officer of Paisa Bazaar.com, says that those who have low CIBIL score, they should increase the scope of their search. They can look for financial institutions that are offering loans at low credit scores. The best way to do this is to compare the loan offers being provided by the banks on the online financial marketplace.
2. Talk with your bank
Pranjal Kamra, CEO of FinTech firm Finology of Raipur, said that if your credit score has deteriorated due to some real problem, then in that case you can talk to the bank directly. If you have been associated with the bank for a long time, then this can be explained. This will help you to get a loan on better terms despite a low or bad credit score.
3. Choose Secured Loan Option
Those who have been denied for loans due to low CIBIL scores or who are being offered loans at very high interest rates, they can choose to take a secured loan. In giving such loans, credit risk is less in front of banks. They used to take a lot of guarantees in the first place. In this way, the importance of credit score is reduced in them.
Money Tap co-founder Anuj Koker said that a person can take a loan on gold, property or securities. However, this option should be used in emergency only.
4. Apply to add a joint loan or guarantor
One way to get a loan despite a low credit score is to take a joint loan. It can be applied for loan (spouse or family member) in association with anyone. The other person should have a good credit score. This increases the chances of getting a loan because another member works as a co-applicant.
5. Take loan from NBFC or P2P lending platform
If there is a low credit score, then non-banking financial companies (NBFCs) can also be contacted instead of banks. Apart from this, the option of taking a loan from the P2P lending platform is open. They have a flexible attitude with less credit. However, these institutions give loans at a much higher rate of interest than the bank.
6. Small loans can be availed
If your credit score is low, then you can take a personal loan for a small amount. A good credit score can be made by paying it. In this process, you gradually improve your credibility.
Why is CIBIL credit score bad ?
Your CIBIL report contains complete information about your account such as bank account, loan and credit card. If all the information is correct, then see how many days there was a delay in the payment of DPD i.e. credit card bills or EMI of a loan. Here, let us tell you that it is not possible to get a personal loan without CIBIL verification.
One of the most important reasons is the lower DPD CIBIL score. DPD tells how many days you have delayed payment of credit card dues or loan EMI in a particular month. These delays only spoil your CIBIL score. However, you can get the CIBIL report correction done by giving the correct reason.
Keep these things in mind
If you clear the credit card bills and other types of loan settlements on time, it helps you to make a good credit score. This increases the chances of getting the loan sanctioned.
Those who are already running a home loan, they can ask their existing bank about the availability of a top-up home loan for another loan.
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