Everything You Should Know About CIBIL Scores for Education Loans

by Ajay Singh Financial Advisor

For an education loan, you need a good credit score. However, there’s a little difference in education loans in comparison to other kinds of loans. The credit score of the students is not evaluated. It is the credit score of the parents or guardian will be checked that actually takes the loan. Since the students are not having a credit background to show, it is the parents or the guardian that actually needs to check my credit score and have a good credit score to get approval on an education loan. It is important to improve your Experian credit score and be eligible for an education loan. An education loan is completely unsecured in nature, therefore the need for a credit score is high.

Important note:

If you are a student without any credit history, then you can apply for an education loan with a working parent as a joint applicant or a guarantor. In such a case, the loan provider will consider the credit report of your parents to determine their repayment capacity on your education loan.

How to improve your credit score to get an education loan?

● Payment history is an important factor in building your credit score. It is very important to make timely payments on your monthly loan instalment as well as credit card bills. There is a due date for every bill amount, and you need to make sure that you do not cross the due date. It is important to make sure that you make your payments by the due date. When you delay the payments, the loan becomes expensive and you end up damaging your credit score. For business loan interest rate visit : business loan interest rate.

● Keep your credit accounts open even when you do not use them. Credit accounts like credit cards and loans are very important if you are trying to build your credit score. A credit account is one of the important factors that are counted in the credit report that offers you a particular credit score. For example, if you have a credit card with a long transaction history that you have been using for a long time, it will add to your credit score. Therefore, if you have such credit accounts in your history you need to make sure that you keep them open. This will help in the improvement of your credit score.

● When you make a payment, make sure there is no pending amount left on your credit card or monthly instalment amount. Any overdue or outstanding amount on credit card bills or monthly instalments of loans will immediately result in credit damage. If you are improving your credit score, you need to stop making minimum payments on your credit cards.

● If you want to improve your credit score, credit building happens only when you do not allow loan providers randomly to run a hard inquiry on your credit profile. When you apply for multiple loan applications, the loan provider will run a hard enquiry check on your credit score. It is important to make sure that you work on your loopholes and do not keep on applying for a loan within a short span of time. Too many loan applications will not allow you to build your credit score.

Wrapping up

A good Experian credit score will help in getting an education loan approved. To get approval, go to the Clix Capital website and look for the option to check my credit score.