How the personal loan can take help of credit card

But the question is whether personal loans and credit cards help an individual’s credit score or not? If it does then how will it help is the next question that needs to be answered? Now we already know that the higher the Credit score getting loan applications gets not only easier but also the interest rates are reduced.

Taking a personal loan for increasing the credit score may not be a great idea considering that personal loan rates are generally expensive. However, personal loans can also be used for anything such as purchasing a vehicle or funding a family vacation. In the case of paying off your credit card dues, a personal loan can help to increase your Credit score. But this step needs to be taken with much caution.

 If you can take up a personal loan with a lower interest rate as compared to the interest rate charged by the credit card company, it becomes a useful medium. But this only helps when paying dues that have accumulated and are hence reflecting as an outstanding amount in the credit card bill statement. 

This can ensure the CIBIL score rising. It is very important to avoid any defaults in the personal loan repayment installments because it can reduce your Credit score for personal loan unpaid status. Personal loans are comparable price than other loans and have little or no value addition if you already have a good Credit score.

If you need a personal loan you can choose a Bajaj Finance Personal Loan.

Tips to Increase CIBIL Score for Credit Cards:

Credit cards are one of the least complicated instruments to start a credit trail. Also, one does not need to pay interest when compared to personal loans, but under the condition that the credit card bills are paid on time. This is a good way to start a Credit score rating. So in case you have no Credit score rating, then it helps to apply for a credit card. But if you already own a credit card, here are some steps you can make sure that owning a credit card helps to enhance your CIBIL score.

1. The important thing for one who has a credit card and wants to increase the score he needs to pay a credit card due on time, not only increasing or keeping your Credit score stable but also to avoid debt.
2. A Credit score shows how an individual has treated their debt in the past. Nothing is more capable of spoiling the credit score than missing payments.
3. Delayed payments or missed payments will destroy the credit score. It is understandable to have done once a year but not regularly.
4. RBI has also sanctioned three days for grace when it comes to paying up the bills. Reports for CIBIL are updated once this grace period is also crossed. This helps the borrower considering that people can forget or there may be a long holiday at the time causing a delay in payments.
5. When one is unable to pay the full amount, paying up the minimum amount due can also help in credit score. But it will add to the compound interest on the remaining amount for the following month(s).
6. If an individual wants to refresh their credit history the best way is to make consistent payments regularly.
7. For people who already have a trail and wish to increase their credit score utilization may be a useful instrument.
8. It’s a good idea to maintain more than one card for special card privileges such as fuel or shopping rewards. 

But the most important is timely payments and clearing of pending payments as well since it reflects your credit behavior and may affect your CIBIL score.