Thursday, 20 September 2018

3 Best Tips to Get Credit With Low CIBIL Score

Posted by RaviKumar Nama
It’s not easy to get a credit card or loan when your CIBIL score isn’t high enough which is usually at least 750. However, then problem is that you can’t increase your score unless you have some credit experience. This makes for a classic “Catch 22” situation. If you are tired of applying for a loan for low CIBIL score only to face one rejection after another, then you shouldn’t lose hope. There are many ways you can increase your creditworthiness and get credit easily.



Checking the CIBIL Report

You should start by checking your credit report which is often called the CIBIL report. There are many benefits to it. For starters, you can take note of your exact CIBIL score which can be divided into the following ranges:
  • Above 750- Excellent 
  • 650-750- Good 
  • 500-750- Fair 
  • Below 500- Poor 
To stand a good chance of getting credit, your score must in the “above 750” category i.e. excellent. If it’s in the good category, then you can still get credit but you may face a few rejections. However, if it’s below than that then it won’t be easy especially if it’s below 500 in which case it will be nearly impossible to get a good loan whether it’s HDFC personal loanor SBI home loan, etc.

If your score is only marginally below 650 or 700, then you can take some time to work on it. For instance, you can start paying your credit card bills on time, lower your credit utilization, etc. Doing these things can easily improve your score to such extent that you can get credit without any problem. However, if the problem is worse, then you can consider the following options:

3 Best Tips to Get Credit With Low CIBIL Score

1. Joint Loans

If you need credit on an urgent basis, then applying for the loan with a co-borrower can be a good idea. In this, you share the responsibility of the loan’s repayment with another person. The idea is that the other co-borrower has a good CIBIL score which balances the equation for you. In other words, a bank is more likely to be comfortable when there is at least one co-borrower that has a reliable credit history.
Although joint loans are pretty common and shown to work most times, it’s not always easy to get a co-borrower and that too someone who has a high creditworthiness. If your spouse or a family member has a high credit score, then they might agree to become a co-borrower. However, if you have to ask a friend, then you may not be able to convince them.

2. P2P Lending

It’s usually not easy to get a loan from traditional lenders even if your credit score is high. Plus, the process itself may seem archaic and slow. This is the reason why P2P lending is becoming so popular.

P2P lending platforms are online portals where you can obtain all kinds of loans quickly and easily. Most importantly, you may qualify even if your credit score is poor. This is because many such platforms consider different types of factors to assess your creditworthiness. For instance, there are platforms that check your “social score” rather than credit score. So, if your online activities don’t put you in bad light, then you can get a loan from a reliable P2P portal easily.

3. Secured Loans

If you have tried all methods but failed to get a loan for low CIBIL score, then you can also try to get a secured loan instead. By offering real estate or an asset like a car or bonds, you can help your bank to feel more secure in offering credit. This is because even if you if are unable to repay the loan down the road, they can seize the property or asset and sell it to get the money they gave to you.



Conclusion

A lot of people underestimate the significance of their CIBIL score and end up ruining their credit report. However, they realize the damage they have caused when try to get one kind of personal loan (HDFC personal loan, for instance) or another. So, it’s best that you prevent situations like these in the first place. Even though credit improvement is possible, it’s not easy and takes a lot of time.

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