A good CIBIL score is essential for anyone looking to take a loan, whether for personal or professional purposes. It is also a major factor in study abroad loan eligibility. EduCred will help you in fixing all your CIBIL issues and here’s all you need to know about CIBIL scores and how they can impact your loan eligibility.
What is CIBIL Score?
CIBIL score is a three-digit number ranging from 300 to 900 that indicates an individual’s creditworthiness. It is calculated based on an individual’s credit history and repayment patterns. A good CIBIL score is considered to be above 750.
How is the CIBIL score calculated?
CIBIL score is calculated based on the following factors:
Payment history: This includes whether you have made your credit card and loan payments on time.
Outstanding debt: This includes the amount of money you owe to creditors.
Length of credit history: A longer credit history is generally indicative of a good CIBIL score.
Types of credit: This includes a mix of different types of credit, such as credit cards, personal loans, etc.
Impact of CIBIL Score on Study Abroad Loan
Your CIBIL score is one of the most important factors that lenders consider when determining your study abroad loan eligibility. A good CIBIL score indicates to lenders that you are a low-risk borrower and are more likely to repay your loan on time. On the other hand, a low CIBIL score may make it difficult to get a loan approved.
CIBIL Score requirement of government banks
Government banks usually have a higher CIBIL score requirement than NBFCs. For example, SBI requires a minimum CIBIL score of 750 for study abroad loans. HDFC Bank, on the other hand, has a minimum CIBIL score requirement of 700.
CIBIL Score requirement of NBFCs
NBFCs usually have a lower CIBIL score requirement than government banks. For example, Axis Bank has a minimum CIBIL score requirement of 600 for study abroad loans.
What happens when the Credit Score goes Down?
There are a number of reasons why your CIBIL score may go down. Some of the most common reasons include:
Missed or late payments: This is one of the biggest factors that can impact your CIBIL score. Even one missed or late payment can cause your score to drop significantly.
Credit card payment issues: If you have been making late payments or have maxed out your credit card, this will also impact your CIBIL score.
Defaulting on a loan: This is the worst thing you can do to your CIBIL score. If you default on a loan, your score will drop significantly and it will take a long time to recover.
How To Improve Your CIBIL Score?
If your CIBIL score is low, there are a number of things you can do to improve it. Some of the most effective methods include:
Make all your payments on time: This is the most important thing you can do to improve your CIBIL score.
Keep your credit card balance low: If you have a credit card, make sure you keep your balance low. maxing out your credit card will have a negative impact on your CIBIL score.
Pay off your debts: If you have any outstanding debts, make sure you pay them off as soon as possible. This will help to improve your CIBIL score.
Check your credit report: Make sure you check your credit report regularly to ensure that all the information is accurate. If there are any errors, make sure you dispute them.
EduCred will help you with everything like guiding you to fix your credit score, planning well in advance for your CIBIL issues, and fixing them.
Better planning will not only save plenty of interest but also will save a lot of hassle and last-minute chaos.
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