Credy offers fast personal loans to customers with low credit score. While looking at
an application, we go beyond looking at just the cibil score or the credit score, and
look at your entire credit report, along with all the loans which you have taken in the
past. This helps us give loans to customers with low cibil score too.
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What to do if you have cibil score has reduced?
Has your credit score reduced? Don’t panic or stress. It can be fixed,
without any cost. You will have to follow a disciplined approach of
continuous improvements and monitoring. Here are 5 proven ways of
preventing your score from reducing further and improving it over time.
Don’t take any more loans
Your net worth is the assets you have (cash, investments, property etc)
MINUS your liabilities (loans, credit card bills etc). Reducing credit
score is typically accompanied by reduction in net worth. Don’t reduce it
further by taking more loans. Keep a target credit score - apply for an
additional loan only if you hit that target (say 720). Applying for a
loan also reduces credit score because banks / financial institution
will make a query for your credit report with credit bureau (e.g. CIBIL)
which reduces your score. Loans also have interest and processing fee
charges which can sometimes be quite high.
Reduce credit card expenses
Credit card utilisation (i.e. % of your credit card limit that you have used up)
is an important part of your credit score. As your utilisation % increases,
your credit score reduces. This is because financial institutions see you has
credit hungry and start avoiding giving more loans or credit cards to you.
Move your credit card expenses to debit card till your score improves. This
will reduce your utilisation % and will increase your credit score.
Repay overdue EMIs
Delays on loan EMI is the biggest reason for credit score to reduce. For every
EMI or credit card payment that you miss, the bank / financial institution
reports this to 4 credit bureaus (CIBIL, Experian, Equifax & CRIF) which
shows in red or orange colour on your credit report. Repay your late EMIs or
credit card bills at the earliest. This would mean cutting some other avoidable
costs and requires discipline. Remember, your credit history cannot be changed -
it will be with you for your entire life. Don’t paint it with red colours. If you
are late on Credy EMI, visit Credy's payment page
and do the payment. Part payment is also allowed.
Lot of times the credit score reduces because of financial stress. It could be
because of medical reason, loss of job, expensive life events like marriage or
unexpected emergencies. You should find ways to reduce costs (by avoiding
un-necessary expenses) and increasing income (for e.g. via husband / wife,
working additional shift etc). This sounds easy but is hard to implement. It
will not show results overnight. You will need to have discipline for some time
(at least 6 months). Once you meet your target credit score, you can relax for
some time and resume some expenditures that you stopped. But remember to
continuously monitor your credit report.
There is a famous saying - if you can’t measure something, you can’t improve
it. Similarly, if you can’t monitor something, you can’t tell if your efforts
of improvement are working. You should check your credit report at least once
a quarter. You should check the following:
If all information is correct. Sometimes financial institutions report wrong
data. If that is the case, you should immediately point it out to them and ask
them to correct within 30 days.
- If score has reduced, reason for reduction in score.
Credy offers Credy Watch
- a way to monitor your credit report, get tips on
improvements, flag any potential errors on your report as well as help you
track changes over time.