Maintaining a good credit score is vital to get your loan or credit card sanctioned from the lender. However, most of the people are unaware about their credit score and apply for a credit card or loan. When the financial institutions decline their loan and credit card applications, they feel frustrated as they don’t know what to do about it particularly when they are in a dire need of funds. If your loan or credit card application has too been denied by a bank or a financial institution, then read further to know- how you can get a loan even with a low credit score.
If your credit score is poor and you have been denied for loan, then you can choose to do one of these things-
Improve Your Credit Score
- Pay credit card bills and loans on time
- Settle down past credit defaults
- Increase your credit card limit
- Avoid being a guarantor to anyone
- Get errors in your credit report corrected immediately
- Don’t make unnecessary loan enquiries
- Don’t over utilize your credit limit
Read More : How to improve your credit score before you buy a house?
Try One of these Options to Get a Loan Approved
If you have a low credit score and need loan urgently, then you can try one of the below given options:
Apply with a Co-Applicant or Guarantor
If you are married and your spouse is working and have a good credit score too, then you can apply for a loan along with your spouse. It will improve the chances of getting your loan approved many times. On the flip side, if you fail to make time payment of EMIs, then the credit score of both of you will plummet.
Seek Loan from NBFCs
NBFCs refers to Non-Banking Financial Institutions. They do not have a banking license but they provide loans. As compared to banks, NBFCs are flexible with credit score but charge higher interest rates.
For the individuals with a low credit score Peer to Peer Lending may be a good option. These institutions provide loans of small amount with or without any collateral but the rate of interest is really very high.
These are some of options that you can consider if you have a low credit score and badly need funds. However, you should always try to maintain a good credit score to get your loan approved easily in times of need.
To keep a tab on your latest credit score, you can request your credit report from one of the three top credit bureaus i.e. Equifax, Experian and TransUnion CIBIL or you can register with Clix Capital that offers free credit score check service.
