My friend told me that if I take personal loan my credit score will improve. Will it help?
Choosing the right Personal Loan is the first step towards a good Credit Score. A loan amount and an interest rate that you can easily service will ensure that you don’t default or miss EMI payments. Timely repayment of your loan has a big impact on your Credit Score.
Once you make your pick, apply away. Make sure you only apply for the loan amount you need. Personal Loan EMIs should fit your budget and not exceed it.
Each loan application lowers your score by a few points. Submit only one Personal Loan application at a time.
Too many loan applications do not increase your probability for a loan. The story is quite the contrary. A deluge of applications will make you appear credit hungry, which banks don’t like, most likely leading to a rejection of all your applications.
A good way to go about this is to compare multiple Personal Loan offers, pick one and submit your application for the one. Do not apply for a loan immediately in case your application gets rejected. Wait for a few months before you submit another application.
It’s very important to decide on the right loan amount before submitting your Personal Loan application. The purpose of taking a loan is to tide over difficult times and to boost your Credit Score, and not to turn the loan a burden on your finances.
If you are taking a Personal Loan just to boost your finances then make sure that you apply for a small amount. This way you can work up your score and also stay away from unmanageable debt.
Timely repayment of your loan EMIs has almost 35% impact on your Credit Score. Nothing will boost your score like repaying all your EMIs on time. Delayed, missed or partial payments can impact your score negatively. This is true also for your Credit Card payments. Want to apply for a Personal Loan? Click here.
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