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These days we spend a lot of time in commuting wherein the maximum time spend is travelling from office to home and vice-versa. When talking about travelling, I always get this question in my mind “Who doesn’t wish to save time along with the combination of comfort and luxury?” Now, this immediately triggers me in buying a car. These days purchasing a car has moved from being a status symbol to necessity. It also becomes an emotional affair if you are buying a new car.
Deciding on purchasing a new car is one of the most expensive decisions we would make, apart from buying a home. We don’t buy a car like we buy any other gadget like a phone or microwave. We just don’t wake up one fine morning and decide to buy a car, walk into any showroom, and swipe our credit or debit card, and driveway back in less than an hour.
One has to make a sensible and smart choice during the selection process which includes deciding on the features, safety, mileage and the most important MONEY. Talking about money most of us definitely, have to go for car loans when we buy a car. When applying for a loan, one must know his/her current financial status, rate of interest on the loan taken, tenure of the loan, and the most important CREDIT SCORE. It is extremely important to have a good credit score as this helps in getting a low rate of interest and also the loan gets sanctioned quickly.
While taking a loan, we generally plan our repayment for a certain period of time. But at times there are situations that you are not in the position to meet the repayment commitment. In this situation, you either approach your bank or lender with the problem, and they will offer you an option of One Time Settlement (OTP). This would seem like a benefit to you, and you immediately jump at it and decide on the one-time settlement. But, you might not be aware that this would badly impact your CIBIL score.
One worry that would run through anyone’s mind after he/she has made a car loan settlement is, “How can I repair my CIBIL score after the settlement process?” The answer is YES; there are ways to improve your CIBIL score. It is not tough to turn around your credit situation. However, it is important to remember that there is no quick or overnight fix to improve your CIBIL score. Just like any diet plan, you need to be disciplined, commitment, and patient enough to achieve your goal.
Below are some of the tips to improve your CIBIL score
1. Change settled status to Closed: Settled status will have a negative impression on your credit score. It shows that you have failed to pay off your dues. It is always better to have a word with your credit card service provider and settle on a mutually decent amount which suits your earnings and affordability. By this, you can convert the status to closed account.
2. Make payments regularly: An adequate way you can patch-up to your score is to make all your credit card/loan payments on time. This will result in positive impact on your CIBIL score. Adopting this good paying habit will take time, but just pay for few months and leave it. All your patience will be well worth the wait.
3. Always use credit: One must not stop using credit cards because he/she has gone through the settlement process. This is definitely not a good idea. Keep in mind that your credit score will get better only if you evidently show your responsible credit behaviour. If not, this will only point towards a decrease in your score. This is another way to boost your credit score. It is always better to use a smaller value of the card limit, and pay your balance in full every single month.
4. Pay off all your outstanding dues: If you have any outstanding dues on your credit card or loan account then it is a negative remark on your score. Initially, it might be very difficult for you to gather money to pay all the pending dues, but this is the best idea to settle down with all your lenders and decide on an amount to pay your dues. How much ever you prolong, your interest will continue to accumulate. This way you will land up paying a large amount to clear your dues. Similarly, even if you delay payment, your credit score constantly decreases. It is not at all advantageous in putting off your outstanding repayments. By paying you outstanding dues will result in a huge step in enhancing your score and future loan-ability.
Who does not wish to have a good CIBIL score?
Most of us do not have a good score due to various factors. Keep in mind that your credit score will not improve unless the creditors know that you are doing every bit to enhance your CIBIL score. This means that you should stop buying products that you can’t afford and start making full payment for all your credit cards and loan accounts. Additionally, you should not take multiple credit cards during the process of improving your credit score, as it is difficult to handle multiple payments.
Above all, having a strict credit behaviour will not only help in progressing the credit rating but also help in developing a healthy credit habit which will be useful in the long run. If you set a target score of 750 which is the least banks expect, then the banks will view you as being credit-worthy. This will boost your CIBIL score over a period of 10-24 months based on your credit situation.
Do not know how settle car loan or improve cibil score after settlement? Creditseva will guide you through the entire process and will ensure that you get a credit worthy again.
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