Low Credit Score

Your credit score is a very important factor for obtaining loans or applying for credit cards.

Yes, you can bounce back from a low credit score. Having a low credit score can be pretty disappointing but with a few measures you can expect to improve your credit score over a period of time. Let us look at what can be done.

Having a low CIBIL™ score is a major hindrance to your financial future. You can face barriers while getting a mortgage, opening a credit card, getting loans, and even getting a job.

Having a low credit score can be a major barrier to your financial future. It can keep you from getting a mortgage, opening a credit card, or even getting a job. But that’s not the only problem. A low credit score can also make it difficult to convince a company to offer you a loan.

A credit score is one of the factors that impact how easily and affordably you can get credit. A low or a poor credit score may be one of the reasons why your credit score application gets declined.

Your CIBIL™ score is a summary of the risk that the lender will have to take while lending you some form of credit. This is why your credit score is important for lenders.

Loans that have been launched specifically for individuals with low or no credit score are called bad credit loans. Borrowers with a low credit score find it difficult to get loans from lenders, as lenders consider such borrowers a high-risk category.

Having a good business credit score is beneficial to your business in several ways. Banks and NBFCs assess the credit score of your organisation before sanctioning loans. The credit report is like a report card of the financial health of your business. It helps lenders evaluate your creditworthiness and decide whether to offer you credit or not. 

Are poor credit scores holding you back from purchasing your dream car? Check out expert tips on how you can get an auto loan even with low credit scores.

You have tried every possible way to repay your loan EMIs on time. In spite of your best efforts, a job loss, pay cuts, illness in the family, your loan repayments may go off the track. There may be situations where due to an unexpected financial crisis, you have fallen behind on your loan payments.

There are a lot of factors that go into calculating a credit score. Following are some of the factors that affect your credit score:

Life is unpredictable. You may have planned your monthly budgets, investments, retirement funds and more, but suddenly out of the blue life throws a curveball at us. There are plenty of situations in life, where emergency loans become necessary. A medical emergency in the family, immediate home repairs after the monsoon season, vehicle repairs after an unexpected accident, a sudden trip with friends – are some of the many circumstances, where we require cash fast.

Debt management is a serious task. With so many loan products in the market, it is very easy to fall into the debt trap, but true brilliance is in staying afloat. Defaulting on your loans is not a pleasant experience.

While good credit score can make you eligible for multiple loan and credit card offers, bad credit can have a negative impact which may prevent you from getting all these credits. However, getting a loan with bad credit is possible if you know where you look for it.

What is considered a bad credit? Who will have bad credit? Will I get approved for a loan if I have bad credit? These are the questions people generally ask when they find their credit score has dipped. If your repayments go for a toss, you might find a reduction in your score.

Obtaining a loan with very bad credit history would seem a herculean task as the banks would want to be ensured of 100% repayment. When you fail to establish your repayment ability, what they look for is a collateral out of which they can retrieve the loan amount.

Having a strong business concept and the passion to drive this business plan into reality sets the foundation to run a successful business. Another factor that is as important to run a business is money. With many lending institutions offering a lot of credit options, it is not difficult to get a business loan. But the difficulty to get any loan approved by the lender is when you have a bad credit score.

Good credit can make many of your life's financial situations easier and pocket-friendly. For example, with good credit, you can get approved for a mortgage or auto loan, and possibly qualify for the best available interest rates and terms. A good credit score can also affect how much you pay for insurance, and whether a utility company asks for little or no deposit before starting a service for you.

Loans or any kind of credit makes owning various assets easier. In addition, it can also help tide over periods of emergency or also aid during times of shortfall of cash. At present, there are loans that cater to various needs right from buying a home, a four-wheeler or a two-wheeler to funding your business or education.

Everyone goes through tough situations at some point in life. Having a bad credit score is one such situation that might make it difficult for you to get a credit through formal lending institutions. The lenders take a deep look at your credit history and take a decision whether to lend to you or not. Considering the risk involved in lending, your credit profile may not qualify for an unsecured loan. However, the chances are not completely ruled out.

Credit Score has become a part and parcel of the credit life of any individual. And by credit score, we mean a good credit score that portrays that you are a creditworthy borrower to a lender. However, it is possible that we all commit mistakes while handling credit and as a result, might have ended with a bad credit score.