What Are The Things You Can Do That Does Not Require CIBIL Score?

CIBIL Score is given by Credit Information Bureau (India) Limited (CIBIL). This score is important for an individual who applies for personal loans and other types of loans. Major banks and money lending institutions all refer to CIBIL Score of the applicant and then process the loan. The minimum score that has to be maintained by an applicant for personal loan eligibility is 750 points. However having a low score can reduce the chances of the loan’s sanctioning but there are other options available as well where an individual can get credit from the bank without the bar of the credit score or having a low credit score.

Here are some of the things that you can do without a CIBIL score:

• Apply for a Credit Card:

Credit Card is issued to an individual proportionately to the amount of money deposited in his or her bank account. The bank provides the individual a credit card which has a limit, which cannot be exceeded by the account holder. The banks sets the limit that ranges between the fifty to hundred percent of the amount deposited in the account of the applicant. A credit card can also help improve the CIBIL score of the applicant if the applicant pays the dues of the credit card on time.

• Get an Add-on Credit Card:

An add-on credit card can be opted by a person who does not have a high credit score. Add-on credit card is provided to the family members of the credit card holder. If a family member has a good credit score then they can apply for the add-on credit card for a person having a low credit score. Most banks provide up to four add-on credit cards. These credit cards are issued after considering the repayment capacity of the credit card holder. If the add-on credit card defaults upon it can tamper the credit score of the credit card holder upon whose account the credit card was issued.

• Opt for a Prepaid Card:

A prepaid card is another option for the people with low credit scores. A prepaid card is easy to use, and one can deposit the money onto the prepaid card and can use it as similar to a credit card, but does not help in increasing the credit scores.

• Collateral Loans:

People with a low CIBIL score who want to apply for a personal loan can proceed with this service provided by the banks. Nowadays, the banks offer loan to people with low credit score by providing them a loan against collateral. The loan is provided by the banks when the individual agrees to keep his belongings such as gold jewelry, shares, fixed deposits, property etc. If the applicant fails to repay the dues of the bank before the deadlines the banks have the authority to sell the collateral and retrieve the amount.

• Applying With a Co-Borrower with Good Credit Score:

A person with a low credit score can also apply for the loan with a co-borrower who has a healthy credit history. The banks will provide the loans on the good credit score of the co-borrower.

• Social lending:

Social lending, also known as peer to peer lending, is a form of debit financing wherein the individual borrows and lends money without any interference of any banks or money lending institutions. Social lending eliminates the middleman but in turn involves risk, can take a lot of time and much efforts are needed in this process of money lending.

• The Company Who Provide a Loan to People with Low Credit Score:

With low credit scores, the individual may have a hard time getting the loan processed. In order to still get the loan, the individual can apply for a loan in the company which provides the loans on a low credit score.

So the having a low CIBIL score doesn’t mean that all doors of finance are closed for an individual. Using the above methods and measures one can get a personal loan processed and also improve CIBIL score.

Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India.