APN News

  • Thursday, September, 2022| Today's Market | Current Time: 11:38:19
  • What Credit Score do you need for a Personal Loan?

    Published on August 16, 2022

    Anuradha’s son had nearly given up all hopes of studying abroad when he received an email from his favourite university saying that he had managed to qualify due to another student’s withdrawal.

    On knowing about his admission Anuradha was overjoyed but was also worried as now she would have to consolidate the funds at short notice. Without wasting any time, she called the IndusInd Bank executive as she had a good rapport with him. He informed her that having a good credit score was very important when seeking a personal loan. That’s when Anuradha asked, “What is a good credit score for a personal loan?” This is what she was told…

    A good credit score or CIBIL score

    A credit score or CIBIL score is a three-digit number ranging from 300 to 900 that denotes a person’s credit history. Essentially it vouches for the creditworthiness of the loan applicant by indicating their repayment history. Getting your personal loan approved greatly depends on your CIBIL score.

    Different lenders may have different CIBIL score requirements, however, generally 750 or above is considered a good credit score when applying for a personal loan. This can also determine your loan amount and finalise the interest rate. Having a good CIBIL score is important because a personal loan is unsecured and uncollateralized. However, it is a myth that you can never bounce back from a bad credit score.

    5 ways to improve your credit score

    1. Assess your CIBIL report

    It is important to look at your CIBIL report and assess why you may have gotten a bad score. This can help you plan for the future and also alert you towards any practices that may be bringing your score down.

    1. Pay your bills

    Having outstanding bills or EMIs could also bring down your credit score. Try to pay off your debts as soon as possible and be mindful of future EMIs. It might be a good idea to activate a payment alert or auto-debit facility.

    1. Credit utilization

    It denotes your dependency on the credit limit. It is advisable to keep your credit utilization below 30% of your credit limit. You could also activate the high balance alert feature on your credit card to prevent adding new charges.

    1. Do not remove old accounts

    People often tend to remove old debts from their credit report once they have been paid. This may not be the best idea as they indicate a good repayment history and ultimately help in improving your credit score.

    1.  Consider debt consolidation

    Having multiple debts could also work in your favour as you could then opt for a debt consolidation loan from your bank and pay them off all at once. This way you would only have one loan to deal with and if you can get a lower interest rate you could service your debt faster.

    Conclusion

    After speaking to the bank executive, Anuradha sat down with her documents. Her CIBIL score happened to match IndusInd Bank’s requirements. The application process, she found, was 100% online and paperless making it extremely convenient for her to fully plan son’s trip and manage the finances. Like Anuradha, if you also have any urgent monetary requirements visit our website and apply for the Indus Easy Credit Personal Loan today.

    SEE COMMENTS

    Leave a Reply