<p style="text-align: justify;">You enjoy sound financial health, when you are not burdened down by the liabilities of any loan. Unfortunately if you do not have substantial savings and unexpected expenses crop up, you have no choice but to avail a loan.</p>
<p style="text-align: justify;">As a salaried employee, you might have to <strong>take a Personal Loan for any exigencies</strong>. These include medical expenditure, your wedding expenses, costs of home improvement, planning a vacation, or to pay for your child’s higher education. When you apply to a bank or NBFC for a Personal Loan, it is your credit score that determines whether your loan will get approved.</p>
<p style="text-align: justify;">Also, the quantum of the loan will be decided after considering your income and outstanding liabilities. If you do not have any outstandings due and have cleared all your credit card bills, you can be sure that your Personal Loan application will be approved. With a good credit score, you will also have more room to negotiate a better rate of interest.</p>
<p style="text-align: justify;">For a self-employed businessman, a high credit score will help garner more funds at lower rates of interest. By settling your creditor dues on time, it is possible to gain a good line of credit. Banks will be more than willing to offer you an overdraft on your current account provided you have a high credit score.</p>
<h3 style="text-align: justify;"><b>Determining your Credit Score</b></h3>
<p style="text-align: justify;">You can approach CIBIL, a credit rating agency to evaluate your credit score. Details such as your age, employment, salary/profits, home loans, automobile loans, education loans, credit card bills are all taken into account. Based on this information, your creditworthiness is assessed and your credit score is quantified. A higher credit score will work in your favour and help you access funds at cheaper interest rates. However, a lower credit score will hamper your efforts of availing a cheaper loan.</p>
<h3 style="text-align: justify;"><b>Credit scores: A Tool to Availing a Personal Loan</b></h3>
<p style="text-align: justify;">A Personal Loan can be the most obvious choice when it comes to meeting an unexpected financial crisis. When you apply for Personal Loans, the bank requires documentation to approve your loan. Usually banks offer Personal Loans to individuals whose monthly salary is more than Rs.20,000 and the loan amount disbursed ranges between 10 and 18 times your monthly salary.</p>
<p style="text-align: justify;">A high credit score will help you get a higher quantum of Personal Loan at lower interest rates. To <strong>determine your Personal Loan eligibility</strong>, you can access the bank website online and provide your personal details such as age, salary, and occupation. After you know the eligibility, information relating to the loan amount, tenure, and interest rate helps to determine the EMI.</p>
<p style="text-align: justify;">If you earn a credit score of over 750, it is a good indicator that you are financially sound and qualifies you to avail a loan to the extent applied for.</p>
<h3 style="text-align: justify;"><b>Factors Affecting the Credit Score</b></h3>
<p style="text-align: justify;">You can enjoy a good credit score by having a limited number of loans and credit card dues outstanding. Similarly paying bills by or before their due date and a steady employment status have a positive impact on your credit score.</p>
<p style="text-align: justify;">Circumstances that can have a detrimental effect on your credit score include holding dozens of credit cards, payments of bills well after the due date, and increasing outstanding balance on multiple credit cards.</p>
<h3 style="text-align: justify;"><b>Steps to Build a Good Credit Score</b></h3>
<p style="text-align: justify;">Just as your good deeds reap you benefits later in life, so does a good credit score offers immense financial benefits. To ensure that you enjoy a good credit score, you should always keep a watch on your outstanding debt and settle them as and when they are due. Also, a comfortable cash position goes a long way in improving your credit score.</p>
<p style="text-align: justify;"><strong>Follow the steps outlined below to maintain a good credit score</strong></p>
<ul>
<li><span style="color: #000000;">Bring in financial prudence by using credit wisely. Just because you hold credit cards does not mean that you resort to impulse purchases. At the end of the billing cycle, you will have to think about how you are going to settle the outstanding balance. Use the credit card sparingly and only to the extent you are sure you can repay. Paying bills by their due dates is the first step to ensuring you enjoy a good credit score.</span></li>
</ul>
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<li><span style="color: #000000;">Borrow only as much as you can pay back. Taking a loan and defaulting on the payment not only attracts penalty but can damage your credit score. To build a good credit score, borrow small amounts and repay on time.</span></li>
</ul>
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<li><span style="color: #000000;">Restrain from taking multiple loans. If you have to take a loan, make sure that you pay off the older loans before you choose to avail a fresh loan. A higher balance of outstanding loans does not help improve your credit score.</span></li>
</ul>
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<li><span style="color: #000000;">Include the old debts that you have paid off in your credit report. The very fact that you successfully have paid off debts proves you to be a dependable borrower. With a low risk attached, you can notch several credit score brownies.</span></li>
</ul>
<p style="text-align: justify;">Building a good credit score is in your hands. Manage credit effectively and make attempts to clear up outstanding balances on credit cards and loans. A good credit score can get downgraded by acts of financial misdoings. Hence, be prudent in matters of finance and enjoy good financial health and reputation.</p>

Your Personal Guide To Building A Solid Credit Score
