A credit score states the probability of the borrower paying back a loan on time. This information is derived from the credit report that tracks the borrower’s number of credit applications, the number of loan accounts, tenure of loan accounts, existing debts, and bill repayment history. Instant loan apps in India consider a credit score as a significant criterion for loan approval. Hence, maintaining a good credit score with regular repayments is important for easy loan approval.
Not only fast approval, but stable credit score also gives a benefit to acquire a low-interest rate. New borrowers who have no credit score can acquire instant cash loans to gradually build a good credit score. First-time borrowers can seek an instant loan based on their income criteria and mandatory documentation.
Here are some best and instant cash loans to build a good credit score:
- Education loan: Students, parents, or guardians can apply for an instant loan based on the affordability and repayment tenure. Managing education loans with timely clearance of EMIs builds a good credit score over a period of time, securing your child’s future with timely financial help.
- Debt consolidation loan: For those who have multiple loans to pay can combine all loans into one and clear the debt. As the debt consolidation loan covers multiple loans, there is no scope of delay in repayments. An instant personal loan taken for debt consolidation can reduce credit utilization and improve your credit history. Using 20% less of your total credit limit is advisable to retain the credit score.
- Commercial loan: Taking a business loan to upgrade or expand the business can help in the easy repayment of loans. As profits increase, the capability of repaying loans also increases. This maintains stability in managing EMIs regularly, thus maintaining a good credit score.
- Gold loan: When you mortgage your gold assets against a loan amount, it becomes mandatory to repay the EMIs on time. Otherwise, it may lead to losing your personal gold. Hence, giving away gold for instant cash builds a pressure on the borrower to repay instalments as scheduled. This stability in repayments derives a good credit score.
- Loan against Property: This is similar to a gold loan where your personal property is given as collateral for a loan. Borrowers repay the EMIs without any delay with a target to unlock the property from the lender as soon as possible. So, even here delay in repayment of loans rarely occurs, this continuity maintains a good credit score.
As per CIBIL guidelines, a month’s negligence in your personal loan payment can reduce your credit score by 100 points. CIBIL - Credit Information Bureau (India) Limited is an agency engaged in maintaining and analysing the records of credit-related activities for corporates as well as individuals. The key to getting personal loans approved without any hassles is to develop healthy financial habits and keep the credit scores consistent across all credit bureaus.