To get any kind of loan, it is important to have a good CIBIL score. But, what if you have never taken any loan. Does doing this make your CIBIL score better or worse. Let's know the answer to this question in this news today. Along with this, we will also know how much CIBIL score is considered right to take any kind of loan.
People avoid taking loans
Often people are afraid of taking loans and prefer to pay cash for everything. Some people also consider credit card as a loan and avoid using it. They feel that this will increase their expenses and their CIBIL score may get spoiled. But, does this really happen?
Importance of CIBIL score and credit history
CIBIL score is a three-digit number that tells the credit history of a person. It decides whether a person will get a loan or not. There is often a perception that not taking a loan is better for credit history. But, not using credit facilities may not be a good option for your CIBIL score. That is, if you have never taken a loan, then you will not have any credit history. This situation can create confusion for credit rating agencies. In such a situation, your score can be zero, which is considered a bad score. With a zero CIBIL score, banks may be uncertain about you. That is, they may have trouble understanding whether you will be able to return their money or not. However, this does not mean that you will not get a loan, but it can affect the interest rates and loan amount.
How to create credit history?
You can correct your credit history in many ways. The easiest way is to buy goods on small EMIs. Like mobile phones, washing machines etc., you can create your credit history without taking much loan. Apart from this, you can also create your credit history by using credit cards.
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