Are you anxious because of your need for urgent funds in Pune? You can get a Personal Loan there without any hassle. Wondering what credit score makes you eligible to apply for a loan? Let us discuss all the details of how the credit score is used to determine your personal loan eligibility and how much credit score is necessary to get a Personal Loan from a reputed NBFC in Pune.
Guidance to Credit Score for Personal Loans in Pune
Top lending institutions and NBFCs like Clix Capital offer loans up to Rs. 10 Lakh at reasonable personal loan interest rates in Pune. A minimum credit score of 630 can help you get the loan which can be used for planning a wedding, travel, or even a medical emergency. The Personal Loan offered for these purposes is unsecured, so there’s no need to provide collateral for security to the lending institution.
Things That Affect Your Credit Score
Payment history, credit usage, length of credit history, kinds of credit accounts, and hard inquiries for new credit are some criteria that affect credit score for Personal Loans.
Your payment history has a direct impact on your credit score. For a personal loan, the minimum credit score is 630. Your score will be higher if you have a record of paying payments on time. However, your score will be worse if you’ve ever skipped a payment or have a history of doing so.
The utilisation of credit ranks second in importance when calculating your credit score. It represents how much of your available credit is being used at any time. The better your score, the lower your usage rate will be.
Your credit score is even affected by the length of your credit history. The longer your background, the better it is. However, if the other factors are in your favour, you might still have a good score even with a limited credit history.
Your credit score also gets impacted by the kind of credit accounts you have. Having a mix of both instalment loans (such as auto loans) and revolving lines of credit (such as credit cards) is generally favourable to having only one type or another.
Inquiries for new credit score for personal loan make up the final factor in determining your score. An inquiry appears on your report each time you apply for new credit. Too many inquiries can signal to the lending institution that you’re desperate for cash or may be taking on too much debt.
How to Raise Your Credit Score?
– Making your payments on time is one of the most crucial aspects that go into calculating your credit score. Always pay the minimum amount required, if not the whole amount, when it’s due.
– Maintaining low balances: How much of your available credit you’re utilising is another aspect taken into account when calculating your credit score. Keeping your balances below 30% of your overall credit limit is essential to maintain a decent score.
– Use caution when applying for new credit. Each time you apply for a loan, a hard inquiry is recorded on your credit report, which might temporarily lower your score. So only apply for new credit lines when you need them.
A credit score of at least 630 is required to get a Personal Loan in Pune. However, it also depends on other factors, such as age, repayment history, monthly income, and debt-to-income ratio. It is important to remember that higher credit scores are one of the key parameters preferred by lending institutions to consider a loan application. A good credit score increases your chances of getting approved for a Personal Loan at the best interest rate.
So, before you plan on applying for a Personal Loan in Pune, maintain an up-to-date record of your repayment history and develop good financial habits to improve your credit score and maximise your chances of approval.
About the Author
Amaira Sharma is finance expert and former business growth strategist who has more than 8+ years experience in the industry, now she helps others to get better financial stability and standards. She loves to write useful tips on personal finance and businesses.