Getting a loan from a bank can sometimes be very difficult. The banks are always apprehensive that an individual may default on the loan repayment and cause the bank immense problems in recovering the loan. It is the reason they try to find out whether you have taken any loan earlier and your repayment history. They call it the credit rating of an individual. If the credit rating is good, then they allow the loan to be sanctioned. If the credit rating is not up to the mark, then there is every possibility that loan would not get sanctioned.
Credit Rating Information
The information about credit rating encompasses all kinds of loan that have been taken by a person. The repayment history of previous loans taken is considered while giving the rating to a person. The rating is called CIBIL rating that is given by a government sponsored agency called the “Credit Information Bureau (India) Limited”. It was formed in 2000 and provides a three digit credit card rating. If you want to get a loan, then you have to improve CIBIL score.
Keeping Ratings High
The best way to increase CIBIL score is to see that there is no default in any of the EMIs at any time. Even a failure to pay the EMI once or twice before the due date can lower the credit rating drastically and spoil all chances of getting a loan in the future. To be on the safe side, it is better to pay the EMI four to five days before the due date. It ensures that the check issued is presented for payment before the last date of payment is over.
Improving Credit Rating
It may have happened that your credit rating has gone down because you had defaulted in an EMI payment at some point in time. You can still improve cibil score by never defaulting on the payment again. Over time as you use your credit card more and more the credit rating improves to some extent. The less you borrow from the bank as credit, the less you have to pay on your EMIs. Being a responsible credit card user can be the only solution to keep your credit card rating above 750.
Avoiding Becoming Defaulter
Defaulting on credit card payments is a curse on your CIBIL rating. There is no alternative to paying the EMIs on time. A safe way of avoiding being a defaulter at any time is to arrange with your bank for the EMI payments through the ECS system. Even if you forget the due date for the EMI, the bank never defaults on your EMI payment and your CIBIL score remains safe. The only way to increase CIBIL score is to have a maximum of two loans running at any point in time.
