Many people face difficulties due to poor CIBIL scores while taking a loan. A better CIBIL score is very important for taking a loan. It is also called a credit score. If you want to take a loan (Bank Loan) and your CIBIL score is between 300 to 900, then it is fine. But, if your CIBIL score is less than 650, then you may face difficulties in getting a loan.

So let's know what is CIBIL score, how important it is. Along with this, we will also discuss how a bad CIBIL score can be improved again.

What is the CIBIL Score? (What is CIBIL Score)

When you go to take a loan or get a credit card, the bank looks at your CIBIL score. This score tells how well you borrow money and return it on time. CIBIL score assesses your financial position. It is calculated based on different factors, such as your ability to repay the loan, the habit of paying on time, and the amount of the loan. If your CIBIL score is high, then not only can you get a loan easily, but the interest rates are also low.

Reasons for Having a Low CIBIL Score

There can be many reasons for a poor CIBIL score. If we talk about the main reasons, then include not paying the loan on time, the amount of the loan, excessive use of credit cards, lack of credit history, etc. Let's know one by one...

Why does the CIBIL score deteriorate?

Not paying money on time: Suppose you have borrowed money from the bank or have a credit card bill, if you do not pay this money on time, then your CIBIL score gets spoiled.

Taking too many loans: If you take a lot of loans, then the bank feels that you may not be able to return all the money. This also reduces the CIBIL score.

Excessive use of credit cards: If you spend too much on credit cards and do not pay the full bill every month, then the CIBIL score can also be bad.

No credit history: If you have never taken a loan or used a credit card, then you will not have any credit history. This means that banks do not know much about you and may hesitate to give you a loan.

What happens if the CIBIL score is bad?

If your CIBIL score is bad, then it will be very difficult for you to get a loan.

Even if you get a loan, you will have to pay more interest.

It will also be difficult for you to get a good credit card.

How to improve the CIBIL score?

To fix a bad CIBIL score, try to repay the outstanding debt as soon as possible. This will improve your credit status. Also, limit the use of your credit card and pay the bill on time. While taking a loan, keep in mind that the interest rate should be low and you should have the capacity to pay that loan. Here we are telling you some easy ways to improve your CIBIL score or credit score...

Pay on time: First of all, you have to pay all your loans on time.

Reduce debt: If you have taken a lot of loans, then try to repay some of the loans.

Use credit card less: Use credit cards as little as possible and pay the full bill every month.

Do not take a new credit card: Do not take a new credit card until your CIBIL score becomes good.

If all this is not working, then you can also take advice from a credit help agency.

How to check your CIBIL score online for free? (Check CIBIL Score)
Mobile wallet app Paytm has launched the facility to check CIBIL score (CIBIL Score for free). Now you users can see your credit report in detail. Through this, you will also be able to see the credit report of active credit cards and loan accounts.