If you have current expenses that need to be deal with but a lack of funds, it is highly likely that you might consider taking an instant personal loan to meet those expenses. Personal loans are one of the most quick and easy options to seek finances for needs that include hospital expenses, home renovations, marriage expenses, etc. After you have aligned the expenses which need to be met, you can finally apply for an instant personal loan from any bank or Non-Banking Finance Company (NBFC). However, before applying for a personal loan at any financial institution, you should refer to their eligibility criteria. This criterion includes pointers such as age, income level, as well as credit score.
The minimum CIBIL credit score to get a personal loan from a bank or NBFC is 750 or above. While it is often referred to as CIBIL score, individual credit scores are provided by companies such as Equifax, Experian, and CRIF High Mark as well.
Why is credit score important for getting a personal loan?
As personal loans do not require assets as collateral, credit scores are the primary determinant of creditworthiness of every individual. Companies such as CIBIL track and collate records of financial and credit-oriented activity of each and every individual and generates a report. This report tracks EMI/credit card payments, balance outstanding, keeping in basis your credit limit as well. If you have made late payments, defaulted on your loans, or used excessive credit, it will have a negative impact on your credit score.
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How can I get to know my credit score?
It was mandated by the Reserve Bank of India in 2016 that every individual is entitled to get one Free Full Credit Report (FFCR) each year, which will contain information including credit score among other things. You can get your free credit report from Experian, Equifax, and CIBIL’s websites or even through the online portals of financial websites.
If my credit score is below 750, can I still get a loan?
The range of credit scores define if you are eligible for a loan. If your credit score is between 300 and 599, it is possible that you will not qualify for a loan. However, if your credit score is slightly below 450, you can still get a personal loan, albeit at a higher interest rate than usual.
How can I improve my credit score?
There are some things you should constantly take care of to keep a healthy credit score. As you might require finances at any point of time, it is advisable to keep a high credit score. You can improve your credit score by paying your bills on time, not keep your balance to be more than 30% of credit limit and pay your current debts at a constant pace. If you do not have ongoing debts, you can also open a credit card account and pay your credit card bills on time to improve your credit score.
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