Credit score ranges from 300 – 900 in India. To apply for a loan for chartered accountant, you need to have a minimum credit score of 750.
Higher credit scores attract lower interest rates on your loan. Therefore, you should always look to increase your credit score.
It is the numerical representation of an individual’s creditworthiness. It gives a concrete idea to the lending institution of how likely you are to repay your EMIs on time.
It also reflects your credit history. Based on your credit score, the lender determines whether to advance you the loan.
Here are a few ways how you can improve your credit score to avail lower interest rates on your chartered account loan –
- Regular payments: Ensure that you make your credit card bill payments and EMI repayments on time. It significantly improves your credit score.
- Credit utilisation ratio: You ought not to use more than 30% of your credit limit on cards. If you regularly exhaust your credit limit, it lowers your credit score.
- Unused credit cards: You should not close your old and unused credit cards. They offer a significant advantage during the assessment of your credit utilisation ratio and also creates a substantial credit history.
- Limited credit: You should limit availing multiple credits at one time. It leads to inquiries from multiple lending institutions, which negatively affects your credit score.
You can follow these tips to improve your credit score before applying for a loan for chartered accountant and increase your chances of loan approval and lower interest rate.