How to Improve your Credit Score with a Personal Loan?
Atul Singh
A personal loan is the best option to meet quick cash requirements. Ticking off the eligibility helps you borrow up to ₹4,00,000 for multiple needs. The best part is that the lender does not monitor the fund usage. You can use the money for a foreign trip, higher studies, grocery purchase, debt consolidation or planning a family event. The top Fintech company goes beyond the traditional lending norms involving hard credit checks. The agents also check non-conventional data like social media behaviour, monthly salary, career experience and education and approve the loan.
Besides funding your expenses, a personal loan can boost your credit score. This is quite helpful if you wish to obtain credit cards or home loans from banks. Here’s how you can maximise the loan to improve your credit profile.
● Regular Payments
Choose a comfortable repayment tenure from 90, 180, 270, 365 and 540 days. Now try to pay off the EMIs without delays. This is an excellent credit improvement method. Credit cards and unsecured personal loans are the top two products that usually influence the credit profile. So, get into the habit of regular payments and avoid defaulting.
● Avoid Multiple Loans
Making too many applications can often backfire. This is because loan rejections, for any reason, can drop your credit scores rapidly. So, pick a trusted digital lending company and read their terms and conditions. Make sure they are flexible, transparent and easy to work with. Now stick to them consistently for all kinds of loan requirements instead of approaching too many lenders in short intervals. It can help borrowers get the funds easily via the loan app and offers a chance to enhance their scores.
● No Foreclosure
A loan taken for credit building should not be paid before it matures. So, keep making regular EMI per month through the tenure of the loan. Then, pay the minimum instead of any additional amount. It can ensure a longer credit history. This is a smart way to increase your score. It also helps you save foreclosure fees and makes the loan affordable in the long run.
● Pick the Right Amount
It does not make sense to take a considerable amount and default if you have credit improvement in mind. So, calculate your current financial status and determine your repayment ability. Use a calculator to know the monthly EMI. Plan the repayment by factoring in other liabilities like utility bills and credit card bills. It will help you pay back on time and boost your credit score to a great extent. Simply download the loan app from Google Play Store or iOS App Store and apply the desired amount as per your eligibility.
Conclusion
However, a personal loan is not the only way to boost your credit performance. Keep a check on errors in the credit profile. Talk to your lender if a timely payment has been marked as ‘missed’ or ‘delayed’, which can severely impact.