Have a low CIBIL score? Here’s how you can still borrow smartly
Your CIBIL score summarises the risk you pose as a borrower, which is why it is of primary importance to lenders. Hence knowing your score and boosting it is crucial for your own sake, as a good score helps you get a better loan deal, whether it is a larger loan amount or a more competitive rate of interest. The first thing to do is to learn how to check your CIBIL score online. There are free and paid ways to do this. You can complete an online CIBIL score check by PAN number or by using another registered ID. No matter which option you choose, getting your score is essential so you can borrow quickly and with ease.
However, what if you check your score and find it too low? This may be a score below 700-750, which is below the range that most lenders prefer. In such cases, you don’t need to lose heart. You can either wait for a while to increase your CIBIL score or you can use other tips to be able to borrow the funds you need right now. Read on to know more.
5 tips to get a loan with a low CIBIL score
1. Showcase a healthy balance in your bank account
With enough funds in your savings or current account, you will be able to convince lenders that you are responsible with money and have the funds to repay the loan, even during a cash crunch. Submit the bank statements of the last 6 months to get a loan even without a great CIBIL score.
2. Prove that you are a responsible taxpayer
Filing taxes on time every year is also a sign of a borrower who is diligent about finances. So, you could submit your IT returns of the past 3 years to lenders to assure them of your good financial habits.
3. Indicate your job and income stability
Along with your bank balance, both your employment and earning potential now and in the future are important when your CIBIL score is low. A stable job at a reputed firm like an MNC can help lenders feel more assured about approving your loan application. Similarly, if you could confirm that you have been earning consistently over the last year through a job that has a growth path with upcoming promotions, you will be able to borrow at pocket-friendly terms. Submit the salary slips you have for the last 6 months to assure lenders of this.
4. Apply with a co-applicant
Another way to get lenders to approve your application is to co-apply for a loan with a family member or spouse who has a good CIBIL score and a good income. This way, lenders will be secure in the knowledge that the repayment is divided between two borrowers and will take the increased income as well as the co-applicants credit score into account.
5. Choose lenders who have simple eligibility terms
Last but not least, apply only with those lenders who have set very simple terms for borrowers to qualify for loans. This way, you can meet the other criteria with ease and explain your current finances using the funds in your bank account, your IT returns, and your career prospects. However, ensure that such lenders don’t have unfriendly terms or a high-interest rate.
Ways to improve your CIBIL score over time
Once you decide where and how to check your CIBIL score online, ensure you download the CIR (credit information report) as well and see if any discrepancies are bringing your score down. Getting these corrected can help boost your score.
- Pay any existing loan EMIs on time or prepay your loan/s in full to boost your score.
- Pay your credit card bills on time and try to increase your credit limit while decreasing your expenses. This helps you reduce your credit utilisation.
- Don’t apply for any new loans or credit cards until your score improves.
- If you haven’t taken credit before, take a small loan and repay it on time.
- If you have only taken a secured loan, take a small collateral-free loan and repay it. This helps you with proving you can handle a mix of credit.
Armed with both these options, you can take the best course of action to suit your needs. To proceed with an online CIBIL score check for free, get your score from Bajaj Finserv.
All you need to do is share a few personal details, verify your profile with an OTP and view your credit score. You can also download your Credit Health Report and get access to personalised offers for a number of financial products including loans and credit cards.
Disclaimer: This content is distributed by Bajaj Finserv. No HT Group journalist is involved in the creation of this content.