Despite being around for a long, credit score has only recently gained popularity. However, a sizable portion of the populace is unaware of credit scores or the existence of their own. The bank informs them abruptly that their personal loan application has been denied because of their low credit score when they request for a loan one day.
What is the Credit Card EMI Process?
Typically, if you use a credit card to make a purchase, you must pay the card company back in the next month. However, using EMI on Credit Card, you can spread out the repayment of large purchases over time rather than having to make a single, large payment.
What occurs if your credit score is low?
A low score indicates that you are a hazardous customer, and banks are typically reluctant to extend you a loan. Your credit score is essentially determined by your repayment history for past loans, whether you have defaulted on or prematurely cancelled any loans, the sorts of loans you have taken, and the percentage of your income that is allocated to debt repayment.
How may someone who has a poor CIBIL Score obtain a personal loan?
You can still receive personal loans even with a poor CIBIL score, albeit it can be difficult. You can get a loan from one of the many new, rising fintech platforms or NBFCs, but they can have higher interest rates.
How do you pick a lender if your credit score is low?
Always do your homework to determine the credibility of the lender. Avoid being a victim of con artists who take your data and never pay off your loan. Some con artists may even present you with favorable terms and conditions, but they will want upfront payment. Neither they nor your money will ever be seen again.
Work toward paying off any credit card bills that are still owed. Always make a full payment on your credit card amount. You shouldn’t limit yourself to making the bare minimal payment.
As soon as you have paid off the entire balance on your credit card, stop making new purchases. Following that, you should only spend money that you can repay in full each month.
You can choose a secured credit card if you do not currently have a credit card and no lender is prepared to issue you one.
Get a credit card for up to 80% of a small fixed deposit you open with the bank. Spend no more than 30 to 40 percent of the available credit when using this card. Your debts should be repaid fully and on schedule. Your credit score will increase significantly.
Avoid cancelling credit cards as a last option. As a result, you will have less credit overall, which could lower your credit score.
You might attempt moving the credit limit to one card if you have several credit cards and want to close them all but keep one. Only if the cards are issued by the same bank may this be allowed.
Don’t keep submitting loan applications and getting denied. Too many loan applications can give the impression that you are credit-hungry, which lowers your credit score.
