Get your CIBIL right: How to become eligible for a personal loan with your CIBIL score
A personal loan is useful to fund a range of financial needs, including home renovation, children’s education, medical emergency, family wedding or a dream vacation.
To improve your chances of getting a personal loan in the near or long-term future and securing reasonable interest rates, you need must have a good CIBIL score.
The CIBIL score is an indicator of a person’s creditworthiness, or their ability to repay loans.
A good CIBIL credit score is considered to be 750 or higher.
Follow our guide to enhancing your CIBIL score that will increase the likelihood of having your personal loan approved.
Check your credit score
Some Bank customers can check their CIBIL score via Netbanking.
You may also request your credit report directly from CIBIL. You may need to make a payment to access the report.
Inspect the report carefully, looking for any errors such as a closed loan marked as pending or a loan you never applied for.
File a dispute with CIBIL to rectify the errors, if required, because these could affect your rating and give you a lower score.
Use credit wisely
It is a good idea to use your credit card regularly, as under-utilisation can lead to a decreased credit limit. This can have a negative impact on your credit score.
A good thumb rule is to use up to 50% of your credit card limit a month.
Pay your dues
Not only should you pay all your dues, but you should also pay them on time, such as loan EMIs and credit card bills.
Late repayments have an adverse effect on credit scores.
Keep it balanced
If you do need credit, opt for a mix of secured and unsecured loans (i.e. debt with and without collateral).
Maintain a reasonable debt-to-income ratio. The higher the debt vis-à-vis your income, the lower your credit score.