To take any kind of loan, it is important for your CIBIL score to be good. But, what if you have never taken any loan. Does doing this make your CIBIL score better or worse? Let us know the answer to this question in this news today. Along with this, we will also know what CIBIL score is considered appropriate for taking any kind of loan.
People avoid taking loans
Often people are afraid of taking loans and prefer to pay cash for everything. Some people consider credit card like a loan and avoid using it. They feel that this will increase their expenses and may worsen their CIBIL score. But, does this really happen?
Importance of CIBIL Score and Credit History
CIBIL Score is a three-digit number that tells the credit history of an individual. It decides whether a person will get a loan or not. There is often a perception that not taking a loan is better for the credit history. But, not using credit facilities may not be a good option for your CIBIL score.
That means, if you have never taken a loan, you will not have any credit history. This situation can create confusion for credit rating agencies. In such a situation, your score may become zero, which is considered a bad score.
With a zero CIBIL score, banks may be unsure of you. This means that they may have trouble understanding whether you will be able to return their money or not. However, this does not mean that you will not get the loan, but it may affect the interest rates and loan amount.
How to make credit history
You can correct your credit history in many ways. The easiest way in this is to buy goods on small EMIs. Like mobile phone, washing machine etc., you can build your credit history without taking much loan. Apart from this, you can also create your credit history by using credit card.
What is the correct CIBIL score?
CIBIL score is measured between 300 to 900. A score of 750 or more is considered best.
Disclaimer: (The information provided here is being provided for information only. It is important to note here that investment in the market is subject to market risks. Always seek expert advice before investing money as an investor. ABPLive.com does not advise anyone It is never advisable to invest money here.)
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