Jatin is an IT business 30 years old. In six figures, his work rewards him. He’s wisely spending his money and pays in due course his taxes and expenses. He’s got a decent 790 credit score. His bid, however, was denied when he asked for a Car Loan. Why should Jatin not get his loan accepted despite a strong 790 credit score?
You heard of the news from CIBIL Score and Credit Score. Otherwise, CIBIL is India Limited’s Credit Information Bureau, which tracks all of your financial histories, including your deposits, credit cards, repayment history, and defaults. Most lenders are their clients, which supply CIBIL with information from all their customers (such as you). Your comprehensive credit report is a CIBIL report comprising your credit, payment history, and your feedback on credit. Other financial information companies, such as CIBIL, publish and use credit values and descriptions. Experian and Equifax are also in businesses. In general, these enterprises offer very close credit analyses & record even small discrepancies.
[ Also read: How to Solve Issues with CIBIL? ]
Most of us believe that a high degree of credit (above 750) is the secret to securing lenders’ approvals. However, several reports were denied of the loan applicants, although the applicant, like Jatin, had a good ranking.
Will a high credit score guarantee a higher loan limit? From Jatin’s example, it is evident that it isn’t. Nowadays, lenders don’t consider the application with a decent credit rating necessarily. In your application, lenders give more weight to credit reports & remarks. Yeah, it’s essential too! Indeed, in some situations, credit reports may be more relevant than your ranking!
We presume that you’ve got a credit card and a personal loan of two kinds. For both of these accounts and their present state, the credit report will include remarks. Now let’s presume that you have closed the Personal Loan. It’ll write off, settle, or close. Statements like “Settled” and “Written-off” are viewed as pessimistic and dismissive. These remarks suggest that you have neglected to make the fees or have paid the debt to a lower degree.
If you plan to pay through your bank, you may call it “settled,” In the future, it can impact your loan applications. You won’t get a loan with a significant paycheck and a decent credit score.
The ‘Account Records’ portion of your credit report provides all of your credit remarks. It includes user info and account status with the creditor’s name & the form of credit facility like (credit card, credit card, home loan, etc. The account number, type of ownership (one, shared, guarantee), the day you open this account, some of the borrower’s credit, current balance, delinquent sums, and a list of the payments received.
The account status shows whether or not the account(s) are clean. You can notice status comments such as a filed or voluntary default, write-off or written-off, and closed with each account. These are negative comments, as stated earlier, that affect the eligibility of your credit. You are less likely to be preferred by lenders if the report includes those statements.
A DPD or Days Past Due portion is also available. This segment includes details about the time of payment. Regular (STD), Special Note Account (SMA), Sub-Standard (SUB), Dubious (DBT), and Losses are the classification categories throughout this portion (LSS). When you see a ‘XXX’ on all of your accounts in your DPD, that means your creditor’s bank has not issued credit details to companies such as CIBIL for a specific month. Note that lenders view any other rating as derogatory rather than ‘STD’ or ‘000.’
In your credit report, you can even see a segment entitled Customer Dispute Notices. It’s an added benefit for users so that you can add specific comments to your pages.
It is 3 digits and reflects the creditworthiness between 300 and 900. To test your credit conduct, lenders look at your credit score. A poor credit rating is an indicator of the high risk of default. Although a threshold score above 750 is not given, it is considered to be a good score.
A credit rating of 750+ is ideal, as previously stated. But that doesn’t mean you’re confident you’re going to get a loan (remember Jatin?). Even if your score is less than 750, you will get a loan more definitely; your comments are acceptable. The point is, however, to prevent your article from making threatening statements. If it is not, you have to attempt to correct the incorrect observations. It’ll boost your credit ranking, and you will not have to worry about increasing it too much.
Get and review your credit score at least a few months before you apply for a loan. If your score is low or negative, take action to correct this before submission.