How To Increase The CIBIL Score With A Business Loan
The CIBIL score is an important factor in the loan approval process. A person with a high CIBIL score has a much better chance of getting a business loan than someone with a low CIBIL score. To improve your credit score, pay your debts/EMIs on time. Plan and estimate your payments with easily accessible Personal loan EMI calculators or business loan EMI calculators.
There are different forms of loans you can know about on the Fast Loan app. Regardless of the type of loan you ask for, the bank will always verify your credit score. If your credit score is low, your prospects of getting a business loan are slim. A decent CIBIL score is greater than 750.
How to increase your CIBIL using a business loan
Pay your dues on time:
If you’ve fallen behind on your EMI or loan payments, now is the time to get back on track. Be careful when paying your bills on time. Make a note of the due dates so that you don’t forget to pay. Some programs provide reminders in the form of text messages and notifications. Try using them. Late payments lead to fines and a decrease in your CIBIL score. Setting up an auto-payment option in your Finance loan app is one of the most effective ways to pay your payments on time.
Do not deactivate old credit cards:
Yes, you heard me accurately. Your old credit cards should not have been deactivated. The duration of your credit history influences your credit score. Each time a credit card is disabled, and a new one is applied, your credit score suffers significantly. As a result, keep your old cards for as long as possible. It increases your credit score.
Maintain credit mix:
This element has the lowest priority of the others. The credit mix refers to the many types of credit used. It specifies the sorts of credit the lender will use, such as credit cards, bank loans, mortgages, and so forth. This factor reflects the entire credit score. Users ignore this factor since they must open multiple credit accounts to maintain it.
Review your credit score:
Review your credit score over time. Credit rating agencies do not always update their scores on time. They may make blunders, such as adopting false information. Your repaid debt may not be updated on the report. As a result, it is recommended that you monitor your credit score on a regular basis. If you bring such errors to their attention, they can remedy them. You can always use credit score checkers to determine your score. The credit rating agency offers a free CIBIL score, so you may easily use their CIBIL score checker.
Avoid joint accounts:
If you have a shared account, your partner’s mistakes can damage your credit score. Assume the other person fails to make a payment, and you become accountable for it as well. Furthermore, do not serve as a guarantee for other loans. If they default, it may impact your score.