COMMON MYTHS ASSOCIATED WITH CIBIL

For bringing more clarity to the loan approval process in India, to make things easy for the lender CIBIL is viewed as a reliable tool. With the help of CIBIL reported, generated every month, the lender approves or rejects loan applications. The majority of customers now have a knowledge of the seminal factors which lenders analyze to scale creditworthiness. But still, many myths related to credit scores keep spreading. Believing in these rumors can lead you to risk at times. Thus, here is a list of the most famous myths and a fact review of them.

Reviewing Credit Report Impacts Your Score

Checking your CIBIL report will not impact your score at all. But if many lenders make inquiries regarding your credit score within a short period, it could damage your score and give a wrong impression to the future lender. Although it is a good habit to track your credit score and report regularly, say once every 3-6 months. It will give you a fact check and give you scope to improve your financial behavior if required.

A low credit score stays on permanently

A low score is generally a consequence of irregular repayment manners. Even if you have defaulted on a loan in the past, it doesn't mean you will have a poor score forever. This score keeps revising as you make progress in your repayment habits.

You can get a small personal loan online from an online NBFC and repay it timely to boost your score. Always remember that every financial institution will always receive the latest CIBIL report the moment you apply for credit.

CIBIL score relies on annual earnings

A credit score is absolutely a look into your repayment history concerning the amount borrowed. It is not an examination of your income or annual revenues. Hence, always remember that even if you have a huge earning capacity, bearing a low CIBIL score, it would still negatively affect your capacity to avail yourself of desired credit.?

Low CIBIL score = No loan or credit card for this lifetime

Credit policies vary from lender to lender. The possibility of your loan application being rejected by one and accepted by another depends from lender to lender. Yet, if you have a poor credit score, you may have to endure the burden of high-interest rates and charges.

Banks and Financial Instituions Influence CIBIL

NBFCs, banks, or other financial institutions have no right to determine your credit score. These only regard your credit score from CIBIL to approve your loan application or a credit card.