One of the key reasons for a commercial loan application being rejected is poor personal or business credit. Borrowers with unhealthy credit get less favourable payment terms from lenders like higher interest rates and insurance premiums. A business loan or small business loan helps small and medium enterprises serve pressing or reoccurring financial necessities with no issues.
To avail credit from banks and non-banking financial Companies (NBFCs), you ought to have a good credit score. Your credit history determines your CIBIL score. Seeking business credit throughout these juvenile periods is an associate uphill task. Don't expect banks to lend massive sums of cash to you at this stage. To enhance your credit score, you may begin by applying for loans for small businesses from banks and NBFCs. Make sure that you explore these choices for business credit. Other than these, with dedicated start-up funding choices, you'll be able to approach peer-to-peer lenders conjointly. It may well be useful to travel for tie-ups with more than one investor. Every person in today’s time needs money to meet their financial requirements which they can lend from various banks or other lending agencies, but before granting the loan, the agencies first evaluate the borrower on multiple parameters of which Credit or CIBIL score is the most important one. CIBIL is the most favoured credit rating agency in India which many lenders prefer for evaluating your creditworthiness. Good credit or CIBIL score is essential, and you can improve the score by keeping a check on a few things which includes the timely pay-off of your credit card balances, clearing off your EMIs timely.
It can be done by periodically evaluating your credit report and if you find any discrepancy then raising it over www.cibil.com. Your good debts present in your credit report also helps you to improve your CIBIL score. Also, take care of avoiding risks of low or no payment of your dues which could be any loan, EMI or even your phone or utility bills because the provider may anytime ask the credit agency to mark you defaulter which will lower down your credit score. In case of your credit card do not overuse it and if the bank has increased your limits then use it wisely. However, if you have some joint financial account, then always keep a check over the payback of EMIs and loans as no-payment by the other person will also hamper your score. However, following some basic tips helps in improving CIBIL or credit score which ultimately not only helps you to get your funds but also to avail it at a reasonable interest rate.
READ MORE HERE: Five steps to build strong credit score