Q1. Why is it important to take care of cibil rating?
Ans. A good cibil score widens your financing options and you could avail loans effortlessly. This will help you to reach your financial goals swiftly as the hindrances are getting eliminated. The lenders seeing your history would be convinced to offer you better loans terms including lower interest rates.
Q2. What is considered a good cibil rating?
Ans. It ranges from 750-900. Anything above 750 confirms to bank that you are trustworthy and credible toward your payments.
Q3. Is it important to ask and maintain a proof for all my past loan records?
Ans. It is always recommended to ask for a proof for your records. Firstly you need to make sure that all your previous records and debts are completely true because the credit bureau is answerable to you as to how they found out a particular record.
Q4. Can I be late in my payments? Would it affect my cibil rating?
Ans. It is a strict NO to be late in your future payments. It would be better if you set up an automatic payment system. Once you have recovered from a bankruptcy, you need to be very careful with your future debts. If you are late on the payment of your debts, it will impact in your cibil rating. Having an automatic payment system would help with timely payments of your debts or EMIs, and you could manually pay yourself the main or larger payments.
Q5. I have a bad cibil rating, how can I rebuild my credit history?
Ans. If you want to rebuild your credibility, it is advisable to get a credit card. It will make your prospective lenders think that you have overcome the financial difficulty and can take up the responsibility of availing credits. But get another credit card only if you are in a position to do so, otherwise you will be just adding up to your misery.
Q6. Is it better to have a blend of Credit Account types?
Ans. Yes, There are chiefly 4 types of credit accounts that control your credit score, namely secured loans, unsecured loans, credit cards and retail cards. It is important to have a mixture of all types of credit types with the most concentration to the secured loans as it impacts your score the most, and you need to be very careful while paying them. But this doesn’t mean you only avail secured loans. A blend of all credit accounts is always preferred.
Q7. Will it help if I use my credit card to a certain limit?
Ans. Often people get oblivious to the importance of Credit vs. Debit ratios. If you keep on using your credit card for your bills without paying it for a long time, it will still impact your credit score. It is preferred that you only use your credit cards under 25% of its usage to keep the ratio in balance.
Q8. Should I close my loan account if there were delays in the past?
Ans. Close the old accounts just because they have a history of late payments does not improve your credit score immediately. These late payment history still reflects on your credit report. However, if there are current overdues, you should settle them immediately.