It seems like adulthood is all about planning for the future. It may not be something you look forward to. But you should not avoid it. Otherwise, you could bear the repercussions when it is too late.
You might get caught up with planning for retirement and for your other life goals. Before that, let’s bring your attention to something that is just as important: your CIBIL score.
You might ask: I am not planning to Get a Loan. Why should I worry about my CIBIL score?
Answer: You need to worry now. You may not get the time to fix it when the need arises in future.
It is important to understand why this is the case.
Know the Importance of CIBIL
The CIBIL score is helpful for banks and Non-Banking Financial Companies (NBFCs). They use it to assess your loan application. Lenders use the score to gauge how creditworthy you might be. The CIBIL score measures your ability to repay loans. The greater your ability to repay debt, the more likely you will be to get a loan. Lenders check your credit score when deciding whether to give you a loan.
The Role of Your Payment History
You may not be planning to get a loan today. But your CIBIL score is being updated over time. Every payment you make stacks up to form your CIBIL score. That includes your credit card transactions and past loan repayments too. So, you must keep your credit score in mind at all times.
Improvements Take Time
It is possible to improve a poor CIBIL score. But it takes time. And when the need arises to get a loan, you may not have time on your side. For example, you may need to apply for a Personal Loan during a medical emergency. Or you decide on a loan a few months before you travel. At such times, a low or moderate credit score will not help. You could end up with a high-interest loan or face rejection. You may not have the time to postpone your loan application to improve your CIBIL score.
Maintaining Your CIBIL score is Easy
Building or maintaining a good credit score is not hard. It will not take much of your time. It involves many easy steps like:
- Paying your credit card bill on time
- Not letting debt pile up
- Not taking on excessive debt, even via a credit card
- Being punctual with all payments
This means you need to be smart about your expenses and money matters. There are also some other easy steps for improving your CIBIL score.
The Last Word
Building a good credit score is like following a healthy lifestyle. It involves small steps that you need to undertake over a period of time. And it is not too difficult. Just like you cannot become fit overnight, your CIBIL score will not improve on short notice. So, what are you waiting for? Build a few good habits today to improve your credit score. Ensure a more secure tomorrow.