By now, you must be aware that your CIBIL Score is one of the most important parameters when it comes to getting a loan or a credit card.
Experts advise building your credit history by borrowing and repaying responsibly. This can help you improve your CIBIL Score and qualify for good terms on personal loans, home loans, and other forms of financing.
If you have never availed of a loan or owned a credit card, your information is not likely to be held by any credit information company. The absence of a credit history results in a score of -1 or ‘no score’. This is also known as a ‘No Hit’ or ‘NH’ case.
Is having a credit score of -1 or NH considered negative?
If you apply for a loan without any credit history, banks and non-banking finance companies (NBFCs) lack a reliable source of information to evaluate the loan application.
This makes it challenging for them to approve your loan and may even force them to use alternative methods to assess the application, causing a longer processing time or even rejection.
However, having a credit score of -1 or ‘NH’ does not indicate a negative financial status. It does suggest that you need to demonstrate a responsible use of credit to assure banks of your creditworthiness.
How to build a credit history?
To establish your credit history and get a credit score, start by getting a loan or credit card and utilising it responsibly over time. Here are some easy ways to build your credit history:
Apply for a credit card
You can apply for a credit card with the bank with which you have an existing relationship like your salary account. Use it responsibly and pay your bills on time to build a positive credit history.
Take a small loan
Start with a small loan, such as a personal loan or a two-wheeler loan, and make timely payments to show your creditworthiness.
Use a credit builder loan
Some banks and NBFCs offer credit builder loans that are specifically designed to help people build their credit scores. These loans usually have a lower interest rate and a shorter repayment period.
Become a co-applicant
You can become a co-applicant for a loan or a credit card with someone who has a good credit history. This will help you establish your credit history and build your score gradually.
In case your CIBIL Score is -1 or no score and have plans to apply for a loan, you should consider building a credit history.
Remember, building a credit history takes time and patience. Make sure to pay your bills on time, keep your credit utilisation low, and avoid applying for too many loans or credit cards at once.
Check your CIBIL Score for free with Bajaj Finserv to see if you are eligible for loans and cards. In fact, you can subscribe to India’s first Credit Pass, powered by CIBIL, to get access to your personalised credit dashboard and a host of other benefits.
