CIBIL Score Rules: For how many years does the CIBIL score remain bad once the loan is defaulted, know these rules
CIBIL Score Rules: Many times we are not able to pay the loan or EMI on time, due to which the lender marks us as a defaulter. When this happens, our CIBIL score is affected. The status of the CIBIL score is so important that its information reaches every bank and financial institution. This means that if your CIBIL score is bad, then the next time you apply for a loan, you may face problems. Now the question is, for how many years does the CIBIL score remain bad once the loan is defaulted. Let's know in the news below -
When a person is unable to repay the loan on time, it is called loan default. This directly affects your credit score, also known as CIBIL score. CIBIL score is a three-digit number that represents your credit history. This score ranges from 300 to 900, where a score of 900 is considered the best.
Importance of CIBIL Score
The importance of CIBIL score can be understood from the fact that whenever you go to take a loan from a bank or financial institution, they first check your CIBIL score. If your score is good, you get the loan easily, but if the score is bad, then either you will not get the loan or you will get it at a very high interest rate.
Loan default and its effects
Defaulting on a loan affects your CIBIL score, just like not getting admission in a college due to poor marks in the exam. After this, whenever you go to a bank to take a loan, you have to face negative feedback due to default. This increases your chances of not getting a loan, and even if you get it, it will be at a higher interest rate.
Is CIBIL score always bad?
This question arises in the minds of many people whether the CIBIL score gets spoiled forever? The answer is no. After loan default, if you repay your outstanding loan amount and interest, then your CIBIL score can improve (cibil score sudharne ka tarika). But the thing to note is that it takes time to improve.
The error in CIBIL score cannot be hidden
The wind of credit score (cibil score) is such that its wave reaches every corner. That is, the negative ranking of your CIBIL score reaches every bank and finance agency.
Whenever you go to a bank to take a loan or to a finance company to take a car loan, they will immediately know about your negative scoring.
In such a situation, either you will not get the loan or even if you get the loan after a long hassle, its interest rate will be charged in an increased manner. Then you get to know very well about the importance of CIBIL score.
How to improve CIBIL score
Positivity comes in the CIBIL score by looking at your transactions and payment of credit card or small and big bills. Do not delay the payment of bills, pay the entire bill on time.
For example, pay the entire credit card bill, not the minimum due amount. This improves the CIBIL score. Many times people do not take NOC from the bank after taking a loan and repaying it on time, due to which the CIBIL score goes negative.
You should immediately take NOC from the bank, only after which your data gets updated on CIBIL. Same is the case with credit card.
If you close the credit card, complete the paperwork with the bank. Do take the certificate of closing the credit card from the bank. All these things improve your CIBIL score.