Credit reports and credit scores play a crucial role in determining your eligibility for an instant small cash loan. A credit score is a number that expresses your repayment potential, whereas your credit report contains information such as your employment history, credit balances, number of debts, and more. However, if your credit report doesn’t look appealing enough, you can always attempt to improve it by following the tips outlined below:
6 Ways to Improve Your CIBIL Score Before Applying for an Instant Small Cash Loan
-
Pay Your Dues on Time
Do you know that paying your outstanding dues on time has a significant impact on your CIBIL score? If not, then here it is. If you often forget your EMI due dates, set a reminder on your phone. If you have trouble paying your dues in the future, apply for a short term instant small cash loan to consolidate your debts and pay them in one go.
-
Avoid Keeping Multiple Credit Cards
Instead of shopping for necessities, many people spend funds obtained through credit cards or personal loans on extravagant lifestyles. However, such wasteful spending only adds to your debt burden. The situation becomes even worse when the budget constraints and the accumulated EMI burden force you to skip your payment, ultimately resulting in a drop in your credit score. Therefore, to avoid any dip in your credibility and to get instant small cash loans without any hassle, it is recommended that you must avoid keeping multiple credit cards.
-
Customize Your Credit Limit
There are several types of loans in which a lending institution allows you to access funds that you can use whenever you need them. The interest rate charged on such a loan is determined by your utilisation. One such credit facility is credit cards. However, many borrowers tend to use all the funds at once. But did you know that this can hurt your credit score? As a general rule of thumb, you should never utilise your credit limit over 30%. If your needs are more substantial, you will need to apply for a credit card with a higher credit limit. This will keep your credit score intact and will also allow you to apply for an instant small cash loan easily through a loan app.
-
Keep an Eye on Your Credit Report
According to data released by the Federal Trade Commission in 2012, around 5% of borrowers had discrepancies in their credit reports. The error in your credit report can result in unfavourable loan terms. When you apply for a loan through a loan app, the lender evaluates your profile using Artificial Intelligence (AI) and Machine Learning (ML). In this situation, your credit score is critical in determining whether or not you are eligible for an instant small cash loan.
You are probably wondering how to report such an error and have it corrected as soon as possible. To do so, go to your previous or existing lender and ask them to send a loan closure and EMI payment report to the credit bureau. The issue will be resolved as soon as the credit bureau receives the upgrade report.
-
Avoid Multiple Loans
To improve your CIBIL score to avail of an instant small cash loan, you must avoid taking multiple loans at the same time. Multiple loans deteriorate your debt-to-income ratio, giving the lender the impression that your income is insufficient to cover your fundamental necessities. Opening several lines of credit not only hurt your credit score but also makes it difficult for you to apply for a small loan through the loan app in future. Therefore, it is recommended that once you take any sort of loan, repay them first before applying for another loan.
-
Use Windfall Gains Wisely
The term “windfall gain” refers to a circumstance in which you receive an unexpected profit such as a bonus during a festival, a sudden gain from stock market investment, an unforeseen inheritance etc. When you receive such benefits, put them to good use by directing them towards your high-interest debt payments. By doing so, you will not only improve your CIBIL score but also find it easier to acquire an instant small cash loan.
Bottom Line
Certain practices can help in boosting your credit score over time. However, it is important to remember that these measures will not result in an instant increase in your score. Once you start working on the above suggestions, it will take a few months for your CIBIL score to go up. So, if your credit score is low and you are planning to take an instant small cash loan using a loan app soon, start using these strategies right away.
Interesting Related Article: “2 Loans to Pursue and 3 Loans to Skip“