If you are reading this, then either you’re worried about your bad credit score or you have just realized that you have a bad credit score and before finding this out you had no idea what is a credit score let alone knowing that you have to keep it above 700 to get a loan easily. The reason can be anything, but by the time you reach the end of this article, you will know how to get a loan with your not-so-good credit score.
But before we jump straight to the point, I think we should make our acquaintances with the credit score.
What is the CIBIL credit score?
Credit Information Bureau (India) Limited score is a 3-digit numeric representation of your credit history. Your CIBIL report, also known as the Credit Information Report (CIR), defines your final CIBIL credit score. Your CIR contains the credit payment history of your various loans regardless of their types. Don’t worry, your CIR does not contain information about your fixed deposits, savings, and investments. If you want to check your CIBIL credit score, then you can purchase your CIBIL Score and Report.
What does it mean when you have a bad credit score?
The financial institutions like banks judge you only by your CIBIL credit score to lend you the loan you want. As a result, if you have below required credit score then chances are, banks will not like to lend you the loan. Basically, your credit score shows how well you repaid your previous loans. Consequently, a bad credit score depicts that you are not good at repaying your loans.
How to get a loan with a low CIBIL credit score?
So far, you know how challenging it can be to get a loan when you have a credit score that is below the bar. To be honest, it is a challenge to get a loan in such a condition, but not impossible. Therefore, we are going to explore the ways from you can get a loan even with your struggling credit score.
But before getting right to the point, one thing that you really need to understand is there are various fraudulent companies are running their businesses for gathering your information only. They will offer you attractive interest rates and will get your information. In the end, there will be no money. So don’t go to them out of desperation, do a thorough background check and only share information if the company seems reliable to you.
Now getting back to the point. So how to get a loan when you have a bad credit score? Follow the following methods to get a loan instantly and improve your credit score.
Get a Personal Loan
There are several reliable fintech companies and other NBFCs are willing to offer you instant personal loans even with your bad credit scores. They have simple and fast loan lending apps that make the entire process smooth and easy. However, as you are a risky customer then the interest rate for you can be relatively higher than normal. But something is better than nothing in the time of necessities.
Related: “Here is the list of Top 10 Instant Personal Loan Lending Apps that will help you to get a personal loan within minutes.”
Improve Your Credit Score
If you have a bad credit score, it doesn’t mean that you can’t improve it. There are several ways you can improve your credit score effectively and apply for loans at healthy interest rates and longer loan repayment duration. Hence, improving your credit score is the best way to get a loan. Refer to the following ways to improve your credit score.
- Stop applying for loans and getting rejected. Because every time you file an application for a loan and it gets rejected, your credit score takes a plunge. Therefore, stop applying for loans for a while.
- If there are outstanding bills on your credit cards, then you need to pay them off in full. Not paying off your outstanding balances takes a lethal toll on your credit score. Hence, make it a habit to pay off bills on time and in full.
- If you have multiple credit cards and you want to resort to using only one credit card, then you shouldn’t cancel all your credit cards. By doing so you will end up reducing your total available credit. What you can do in such a situation is to try transferring the credit limit to just one card.
- Don’t overspend on your credit card. Only spend what you can repay in full.
- If you don’t have a credit and no bank is willing to offer you one, then you can make a fixed deposit and get a credit card having a credit limit of 80% of this deposit. After that, you can do spend from the credit card and pay your bills on time and in full. This will also help you to improve your credit score.
These are some of the ways you can get a loan when you have a bad credit score. But remember, once you get your credit score above 700, keep it maintained.
Rahul Mathur is the founder and managing director of ARKA Softwares, a company renowned for its outstanding mobile app development and web development solutions as well as specialized in Android and iOS app development. Delivering high-end modern solutions to all over the globe, Rahul takes pleasure in sharing his experiences and views on latest technological trends.