Last updated on August 25th, 2019 at 04:45 pm
In case you’re suffering from a bad or poor CIBIL score, rebuilding your credit rating is important if you wish to get credit in your future. Luckily, reconstructing your credit score isn’t that difficult. By following simple measures such as reviewing your CIBIL report, paying bills timely, reducing the existing debt and reducing the number of new accounts could help improve your CIBIL score.
Credit cards and personal loans are two ways of rebuilding your credit score. Although the credit cards offer convenience, usually they have high rates of interest. Therefore, improving Credit Score with Personal Loans is a better choice.
When you take a personal loan and pay it to them back on time, such repayment pattern reflects on your CIBIL report. Improving Credit Score with Personal Loans is important since repaying just one loan at a time wouldn’t have the effect to your CIBIL score which you’re looking for. By taking personals loans and paying them on time, you could expect positive remarks on your CIBIL report, which would show a positive bearing on the CIBIL score in the long run. Improving Credit Score with Personal Loans is one of the easy ways to fix your bad or poor credit score.
Improving Credit Score with Personal Loans
Getting loans from banks or other mainstream lenders could be difficult in case you’re having low or poor creditworthiness. Short-term loan providers such as PaySense often have less stringent lending criteria that why they offer loans to people with bad or poor credit ratings.
When you take a personal loan, you need to repay as per a schedule. Upon the successful settlement of the loan, you could expect that the lender would report your timely repayment to all the major credit bureaus.
In case the ultimate purpose of your personal loan is for rebuilding your credit score, then you should borrow only small amounts. This way, you could rebuild your credit and don’t have to worry about taking a huge debt.
Use the personal loan for the purpose of debt consolidation. The interest and EMI payments of your personal loan are usually lower than that of your credit cards. Hence, it’s a good practice to use your personal loan for settling the high interest bearing credit card debts in case you have any. Also, be prudent and keep the loan amount below 30 percent of your available loan amount or credit limit.
Also Read: Check your Credit Score in 5 easy Steps
Benefits of Improving Credit Score with Personal Loans
Individuals suffering from bad or poor creditworthiness usually find it very difficult to get credit; however, they could qualify for personal loans. Short term loan providers don’t pay much heed on the credit reports like the traditional lenders; they emphasize the ability of the borrower to repay the said loan.
A personal loan could give you access to funds much faster and easier than a conventional loan. Some of the short-term lenders could give you the access to loan on the very day you apply, and some of the lenders would transfer the fund in your bank account the next business day.