Lending institutions are not at all bothered about your asset allocation or investments. All that they are concerned about is whether you are capable enough of paying your debts within time and in full or not. Most people fear to apply for a loan since they feel that they do not have enough amounts of investments to their credit. However, it may be reiterated that your investment portfolio makes no difference while deciding your CIBIL score.
It may be interesting to note that banks prefer applicants who have previously opted or availed loans either from the same financial institution in which they are subsequently applying or from another financial institution. This is because it helps them gauge their financial soundness and decide if it is really worth lending money to the applicant. However, banks may be reluctant to lend to persons who haven’t previously obtained loans at all since it might give them no indication of the credit worthiness.
It is therefore often said that a proven clean track record of payments of debts is always preferable than having a zero credit history.
For those of you who think that previously obtained loans make them ineligible to opt for subsequent loans, it should be understood that as far as you are regular with your payments of EMIs, obtaining a successive loan does not adversely affect your CIBIL score.
- Low Balance Savings Account
Having a low balance in your bank account is no reason to reduce your CIBIL score. Usually, account holders are under the belief that a low balance in their bank account would make their CIBIL score plunge. However, it should be realised that a CIBIL score is only for knowing about any credit and its repayment by the borrower and is not concerned with the amount of balance that the account retains. However, from a personal perspective, it is only in good stride that any inoperative savings accounts are taken care of from the view point of financial control.
Another misconception with respect to CIBIL scores is that the credit score of your spouse affects your own score. However, it may be clarified here that such is not the case unless a joint loan is being obtained by both, the husband as well as the wife. Lenders should know that a husband and wife are separate legal entities when it comes to finances and the performance of a spouse with regards to payment of credit does not affect the other.
It is also recommended that a joint loan may only be obtained when there are tax benefits or where the spouse is a working professional since such an advantage enhances your joint CIBIL score.
Some people also fear that having multiple credit cards would deter them from availing loans and would have a negative impact on their CIBIL score. However, essentially, if a person pays his/her credit card bills in time and in full, having multiple credit cards cannot be a deterrent while availing loans. In fact, it only helps the financial institution get a better idea of your financial payment regime and thus helps them serve better.
