Tips to improve credit score for first-time borrowers | Fusion - WeRIndia

Tips to improve credit score for first-time borrowers

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

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