Loan probability with minus Cibil score: Prateek Srivastava, a resident of Delhi, has a good job. He earns Rs 1.5 lakh every month. There are a total of 3 members in his family. All the household expenses are met and savings done easily with his salary.
He never needed to take a loan or a credit card to accomplish any of his financial goals.
However, Prateek was confident that whenever he applies for a loan from the bank, he will not face any problem because his salary is quite good.
He required a loan as in this festive season, Prateek is planning to buy a Sports Utility Vehicle.
He thought that he would give some money as down payment and the remaining amount would be taken care of through a loan from a bank.
But when he approached the bank for the loan, his CIBIL score came out to be in minus.
The reason for this was that he had no previous credit history.
In such a situation, banks were also hesitant in giving him a loan.
Prateek is not the only such person. There are many people who despite having a good salary can face a similar problem.
In such a situation, what is the option available to them to improve their CIBIL score? Know about it here.
Why CIBIL score can be in negative
It is very important to have a good credit score for taking a loan.
The better the CIBIL score, the easier it will be to get the loan.
The CIBIL score is determined by credit agencies and it can be anywhere between 300 to 900.
A CIBIL score of 750 or above is considered good for taking a loan.
But if you have never taken any loan and you also do not use a credit card, you do not have any credit history.
In this situation, your credit score becomes -1, which in also called as zero credit score.
While a lender comes across such a situation, it thinks that on what basis, it should consider the applicant’s credit worthiness.
This is the reason why banks hesitate in giving loan to the person with a minus credit score.
Many times, lenders outrightly refuses to lend money to such a person.
Is there a possibility of getting a loan with a minus CIBIL score?
In this case, an officer working in a government bank says that if the CIBIL score is in minus, the banks judge the creditworthiness of the person on other parameters.
In such a situation, the person’s source of income, their educational qualification, etc., are considered.
For example, if a person is a doctor or CA or holding any higher position, then even if they do not have a credit history, they have full chances of getting a loan because their income is quite good.
But if anyone does not have such a high profile job, then they can assure the bank by giving their bank statements of few years to prove their good financial condition.
Apart from this, one can also show all their bills which they have been paying regularly till now as proof.
After going through such documents, if the bank is assured, then it can give the loan.
What is the way to improve minus CIBIL score?
The way to increase the minus CIBIL score is to take a loan in some way or the other.
But if banks are not giving you a loan due to the lack of credit history, you have two options to increase your credit score.
First, either you take a credit card from the bank, start using it and make the payment on time.
With this, your loan history will start in the banking system and your CIBIL score will also be updated in two or three weeks.
The other way is to make two small FDs of Rs 10,000 each in the bank.
After opening the FD, take a loan against it under overdraft facility.
As soon as you withdraw money from your FD under overdraft, your loan will start and soon your credit score will start improving.