A CIBIL Score, which is also known as a credit score, is a 3-digit number issued by the Credit Information Bureau Limited India (CIBIL). A credit score decides your creditworthiness and your eligibility for availing a loan. The credit score can fall anywhere between 300 to 900, with above 750 being considered a good credit score.
A score below 750 is considered a bad credit score and it becomes difficult to avail loans with financial institutions. Some of the reasons and repercussions of a low credit score in India are:
Late Credit Card Bill Payments
Continuous default on credit card bill payments or even delaying the payments can lead to a bad credit score. Not just credit card payments, but also default or delay in EMI payments can negatively impact your credit score.
Hitting Credit Limit Too Soon
Exorbitant spending and reaching the credit card limit within a short span of time can create a bad impression on lenders. It is vital to create an impression of a responsible borrower for the best rates on any loan.
Having too many loans or applying for multiple loans simultaneously will automatically lead to the assumption of default on one or more of the payments. This is why it is advisable to not have too many loans in hand at once.
Just like how too much spending can have unwanted consequences, no spending at all or inactivity can also have the same effect. This is because a credit history is imperative for lenders before giving a loan.
These are some factors that must be taken into account to ensure and maintain a good credit score.
For availing an instant loan for low CIBIL score, it is important to follow and keep the below-listed factors in mind:
Research the Lender
The first and foremost factor is making sure you know your lender or lending organisation through and through. Checking the website and credentials, reading customer testimonials, etc. are some ways to ensure the authority and the legitimacy of your lender.
The interest rates vary from lender to lender. For an instant loan for low CIBIL score, lenders may charge a higher interest rate comparatively. With a low CIBIL score, the interest rates may even be above 14% in some cases.
In the recent past, with the advent of online lenders, a low credit score is not a hassle or barrier anymore. There is a myriad of different ways to apply for loans, even through an EMI Shopping App. With Artificial Intelligence and Data Analytics tools, the process and procedures for availing a loan through online lenders are easy and hassle-free.
ZestMoney, an online EMI Shopping App, is an excellent platform to avail instant loans with low credit scores. You do not have to worry about eligibility criteria if you have a poor CIBIL score with ZestMoney. ZestMoney through the use of AI assigns a certain credit limit based on the information submitted and you can use this credit limit to take a personal loan with ZestMoney.