When it comes to loans, every lender may have its own parameters to approve the application. And the cibil score is one of the crucial factors that determine your loan eligibility.
If you are applying for a secured loan such as a mortgage loan, lenders may look at your credit score as a vital eligibility element.
Mortgage loans need you to pledge property as collateral, and that’s why interest rates are lower on it. Keeping collateral may help you get the loan at an affordable rate. But your lender may still check your credit score to know if you are the right candidate.
And it is where maintaining a robust credit score may help you get the loan approval fast. Lenders want you to keep a credit score of 750 or more to sanction your loan application.
What if you don’t have a healthy cibil score? In this case, either your mortgage loan application may be rejected, or you may get it at a higher rate of interest.
But you can always improve your credit score if it’s poor and help yourself secure the mortgage loan approval easily.
Let’s discuss some easy ways you can improve your cibil score!
Consider these aspects to see your cibil score improved
Pay your ongoing loan EMIs and credit card outstanding on time
The repayment of the outstanding debt concerning your existing loan EMIs, credit card bills, and more can affect your credit score significantly. And that’s why it becomes vital to be disciplined while paying your EMIs. Any delay in the payment can lead to a penalty and even hamper your cibil score. Thus, you should set payment reminders so that you never miss a due date.
Don’t close your older credit cards
If you have some old credit cards, then you should ensure to continue using it as long as you are able to pay the total amount due by the due date. Why? It can assist you in building a strong and lengthy credit history. In turn, it can help you enhance and maintain a robust cibil score in the future. Be it the mortgage loan or any other; you will find no issues in getting the loan approval at an affordable rate. To know your eligibility and exact payable EMIs, you can use the mortgage loan calculator online.
Go for a longer tenor while availing a loan
When you have a loan to apply for, it would be advisable to opt for a longer tenor. It will help you manage only a smaller EMI. And paying a lower EMI will be easier for you. In turn, you will not only pay off your loan on time but even manage a higher credit score. The only downside of the longer tenor is that you will need to deal with paying a bit higher rate of interest. But you can always reduce that by making prepayments.
Avoid taking way too much loan at a time
The kind of loans that you can avail yourself at a time should be minimal. The standard practice is availing of one loan, repaying it, and then moving on to the next. This way, you can keep paying the EMIs on time and maintain a higher credit score. If you take many loans at a time, then you may land in a debt soup. You may also default on different EMIs, and that may hit your credit score hard.
Checking your cibil report for mistakes can help
Many a time, your credit score may take a beating if there are some errors in your credit report. You may or may not be responsible for the mistakes on your credit report. If you don’t resolve the same, then your credit score may be affected. Thus, it is recommended to check your credit report from time to time. If there are any entries that you may not have done, then you can get them corrected. This way, you can keep your cibil score in a healthy state and get the approval for the mortgage loan without issues.
Also Read: 9 Tips to Get the Best Car Title Loans
Maintain a mixed line of credits
Many borrowers continue applying for unsecured loans such as personal loans, credit cards, and more, while some avail secured ones like mortgage loans. But to keep your credit score unaffected, it is important to maintain a mix of both. Yes, you should strive to avail both types of loans – secured and unsecured. If you do that and repay the debts on time, then you will have no issues in seeing your credit score improving big time.
You just now went through some of the key ways you can build and keep your credit score strong. Having a robust cibil score will help you avail the mortgage loan approval at an affordable rate and save on EMI payments.