First Time Borrowers – You Need to Keep Your Chit Clean!!


There’s always a first time!! All of us have heard this phrase, and the same applies to all those people who are borrowing for the first time. The problem that lenders usually face with first-time borrowers is that they do not have sufficient financial history that will support their economic background.  Not having a credit history is certainly a great hindrance. Lack of a cross check data will hinder you from availing home loan, credit card, auto loan, etc. Understand the fact that it is impossible to prove your creditworthiness without an authentic credit history.

In general, every credit card company or a lender will take into consideration certain aspects before offering any sort of financial aid. The primary thing that they will consider is your CIBIL score, but if you do not have a credit history you will certainly not have a credit score.

Considering all this, CIBIL now emphasises on gathering information about first-time borrowers. The main aim is to reduce the risk of all those creditors who are lending money to first-time borrowers.

If you are a first-time borrower, CIBIL certainly will not have any financial data pertaining to you. However, when a person applies for a loan, the lender is bound to contact CIBIL for your credit report. Since you are a first-time borrower, the lender will not be able to get a credit report from CIBIL. When such an incident happens, all your personal details like name, date of birth, address, phone number, etc. is recorded by CIBIL. Apart from this the nature of the loan applied for also gets recorded. This in financial terms is called as an “Enquiry”.

Once an enquiry is made, your details are with CIBIL and any further progress with reference to the same, will be recorded. This gradually will help build your credit history.

Considering all these backdrops, CIBIL insists that people keep the following updated, clean and safe:

  • Mobile bills
  • Landline bills
  • Broadband bill accounts
  • Utility payments like elect, LPG, water etc.

These small payments can play a major role in building a positive credit history for first-time borrowers. A failure to do so showcases that the applicant is incapable in clearing regular bills, as well. This in turn, will stop lenders offering any financial aid. Ensure that all your payments are up-to-date because this is the only way to prove your creditworthiness.

Updated: December 21, 2016 — 1:26 pm

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