In 2019, with RBI slashing its repo rate for the fourth consecutive time, a reduction in the MCLR has led to financial institutions offering credits at competitive interest rates. This has prompted individuals to seek more advances from lenders. 

However, factors like low CIBIL score can make it difficult for them to avail the loan. Your CIBIL or credit score is your credit history summary, which ranges from 300 to 900. Lenders usually look for a credit score above 700 to deem an individual eligible to avail the advance. Thus, if your credit score is low, you should know how to increase CIBIL score to improve your creditworthiness.

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Below are some ways your CIBIL score can be affected:

Factors Responsible For Low Credit Score

A credit score is a direct reflection of your repayment ability while borrowing a loan. A lot of factors are responsible for a low credit score, and these are listed below.

    • Your repayment history
      Any debt on your existing loan or credit card can affect your CIBIL score negatively. Thus, it is advisable to pay your dues on time, which is one of the useful tips on how to increase CIBIL score.
  • Reaching credit limit
    Over usage of credit cards can affect your credit score negatively. Those who intend to maintain a higher CIBIL score must ensure that their credit card usage is not reaching beyond 30% of the card’s limit. Having a good credit score will also enhance your chances of availing advances such as a loan against property or home loans. 

How To Avail Loan Against Property With Low Credit Score?

If you are anxious to know as to how can I borrow money with bad credit score, then the following tips will be worthwhile.

  • When an individual applies for a secured loan, then it is better to request for low LTV. LTV or Loan to Value denotes the ratio of a loan to the value of the mortgaged property. Your chances of availing the advance increase considerably if you apply for a lower LTV. It is an important consideration to know before applying for a loan against property. 
  • Addition of a co-applicant is an effective way to ensure the lender about your repayment capabilities. If the co-applicant has a clear credit history, then it proves advantageous for you. It will help the actual applicant to guarantee low credit loan.
  • Financial institutions might provide you with an advance even with a low credit score if there is a guarantor to support your claim. The individual who acts as financial support needs to have a high CIBIL score. 

Ways to increase Credit score

Given below are some tips on how to increase CIBIL score that you can consider: 

  • Timely repayments

 The best way to improve your score is by paying your existing dues on time. If you fail to pay your dues on time, consider opting for a debt consolidation, which helps manage your finances better and improves your credit score. 

  • Keep a low credit utilisation ratio

Credit utilisation ratio refers to the percentage of amount you useagainst the available credit limit. A low credit utilisation ratio indicates that you manage your credits well and helps to boost your CIBIL score. 

With a higher credit score, you also get to avail a loan at a lower interest rate. For secured loans like loan against property, various financial institutions and NBFCs offer a substantial credit amount up to Rs. 3.5 Crore with a tenor up to 20 years; Bajaj Finserv being one of them. They also provide: 

  • online account access 
  • secure EMI options
  • balance transfer facilities
  • Instant approval

Bajaj Finserv has also brought pre-approved offers to simplify the application process and to save your time. Pre-approved offers can be availed on unsecured advances like personal loans and business loans and secured credits like home loans. Share your contact details to check your pre-approved offer.

Additional Read: Minimum CIBIL score required for Loan Against Property

Another tip to know on how to increase CIBIL score is to try and mix your credit usage. If you avail a healthy mixture of secured and unsecured credits, it shows that you are not too reliant on a single credit for all your payments. This reflects positively on your credit score and history.


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Ayushi Choudhary is a content writer and a blogger having year of experience.

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