How to improve Credit with Personal Loans
There are a lot of myths circulating in the Internet about how to improve your credit score. One of the most common myth is this—you need to get yourself into debt if you want to improve your credit score.
A good credit score can help you get approved for a home loan, auto loan or a personal loan. Your credit score will also influence the interest rate you pay on your loans. Lenders generally look for a credit score of 750 and above while making a sanctioning decision and give much lower interest rates to people with high scores.
So, do you really need to borrow against a credit card or get a personal loan to improve your score? Let's find out.
1.) Make sure that you pay off your EMI/credit card dues in full, every month before the due date. If you do this regularly, it should be enough to give you a good score. It is never advisable to borrow money that you don't need just to improve your score.
2.) On the other hand, if you are neck deep in credit card and other multiple debts, then taking a personal loan to improve your financial situation might be a good choice. The idea is to pay off existing debts using a single loan thereby leaving you with just one monthly payment rather than several. This way, you will be able to concentrate on one single EMI, rather than several. It will also help keep your credit utilization ratio in check, thereby improving your score in the long run.
But I am new to credit. How do I build a credit history?
If you are new to credit, then you might find it difficult to access credit when you need it. In such cases, it is advised to take up specialized score builder product like a secured credit card that will help you build a positive credit history, provided you pay your dues in full every month!
How do I apply for a score builder product?
To help users who with limited or no credit history, CreditMantri has created a special, first of its kind personal loan in partnership with Shriram City Union Finance (SCUF) which helps customers get a loan and at the same time build their credit score and history. The loan application process has the added advantage of minimal documentation.
Why apply for this product?
• Helps you get a loan for Rs 25,000 or Rs 50,000
• Loan tenor of 6 months or 12 months
• Build your credit history and score in parallel
• Leverage the power of your social profile to access credit
This is an excellent score builder product which will act as a stepping stone to make you credit worthy.
You could also apply for secured credit card that helps you build your credit score and history in an easy, hassle-free manner.
Such products will introduce you to the world of credit and act as a stepping stone to make you credit worthy. Click here to sign up for free and apply for loans and other credit products!