Tips to improve credit score for first-time borrowers
Normally, it is difficult for first-time borrowers to get a loan due to lack of credit history.
However, various credit agencies provide reports by assessing first-time borrowers based on certain parameters.
There are other factors that banks consider while granting a loan as well.
First-time borrowers can still improve their score by considering these factors:
- Maintain a higher amount in your savings account than the minimum prescribed balance by the bank. Maintaining a consistent good balance in your account improves your chances of getting a loan.
- Make sure that all your issued cheques are not bounced or dishonoured. Bankers consider this as a positive credit factor.
- Begin with small and secured loans like a gold loan to improve your credit score. You can start with an entry-level credit card or a student credit card. You can be a part of a joint loan with your family member.
- Employment in the public-sector company or a reputed private organization is considered as a lower risk factor by banks. So try to find out a good job in a reputed organization and stay there for a long time.
- Changing employment frequently might also affect your loan as regular employees will have higher chances of loan approvals.
- If the borrower is living in an own house and has been residing there for a long time, then it is a positive factor for the lender to offer a loan. On the other hand, people who reside in a rented apartment or for a shorter duration will have lesser chances.
- First-time borrowers will also be assessed based on the size of the loan and the type of loan like secured such as home loan, or unsecured like a personal loan. Banks also consider his/her age, address etc. to evaluate.
Image Credits : Nick Youngson CC BY-SA 3.0 Alpha Stock Images
Image Reference: https://picpedia.org/handwriting/c/credit-score.html
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