WHY WOMEN SHOULD BUILD THEIR CIBIL SCORE?

There has been a considerable increase in the number of women entrepreneurs across the country in recent years. The Indian government has developed numerous initiatives to support women entrepreneurs financially, including the Annapurna scheme, Udyogini scheme, Mudra yojana scheme, and others. Aside from that, women entrepreneurs might think about getting a small business loan for their start-up.

When it comes to acquiring loans from financial institutions like banks and NBFCs, Indian women have surpassed their male partners. According to a survey by credit agency TransUnion CIBIL, between 2015 and 2018, India has seen a 48 percent increase in successful loan applications among women borrowers. Male borrowers, on the other hand, are growing at a slower rate of 35%. According to the data, 8.6 million new-to-credit women borrowers open new loan accounts each year, with 66 percent of these women hailing from Tamil Nadu, Kerala, Andhra Pradesh, Maharashtra, and Karnataka.

“The rise in female credit demand and uptake provides an opportunity for the credit industry to tailor products and services to better meet the financial needs of female borrowers,” said Harshala Chandorkar, COO of TransUnion CIBIL. ” The government’s financial inclusion measures geared towards women have also aided in this development. Transunion Cibil anticipates increased loan demand from women borrowers in the future, owing to a number of variables including increased female education, increased consumer durables spending in tier I and tier II markets, and a spike in the proportion of women in the workforce.

According to the survey, a large percentage of business loans come from states with the highest number of female MSME owners. With an average CIBIL Score of 781 among women, Tamil Nadu and Kerala have the lowest borrowing risk profiles among the top borrowing states in the country. Surprisingly, the data collected reveals that financial prudence and the average CIBIL Score among all women rises with age. Women under the age of 35 had an average credit score of 773, while those between the ages of 35 and 45 had a score of 776, and those over 45 had an average credit score of 785. All Indian women consumers have a CIBIL Score of 770 or above.

Nowadays, with the help of leading financial institutions, availing a small business loan has become a quick and hassle-free process. However, before applying for a small business loan, women entrepreneurs should make sure that they have a high credit score.  A good CIBIL Score can help consumers gain access to better credit offers faster. Also, most of the lenders typically consider a credit score above 750 as an ideal score.

LET’S SEE WHY IT IS ESSENTIAL FOR WOMEN TO BUILD THEIR CIBIL SCORE!

  • Before granting a loan application, financial organizations analyze the applicant’s credit score. As a result, women who have a strong credit score will be eligible for a larger loan. Furthermore, if they have a good credit score, they will be able to negotiate the interest rate offered by the lender. A bad credit history, on the other hand, can hurt your possibilities of getting a loan. This is because a borrower with a low credit score is regarded as a high-risk borrower.
  • As credit score determines loan eligibility, it is essential for women entrepreneurs to maintain a strong credit score by making on-time payments and paying off outstanding debts. By optimizing their spending habits and managing their funds intelligently, women entrepreneurs can considerably improve their credit score.

IMPROVE YOUR CIBIL SCORE WITH THE FOLLOWING TIPS

  • If you want to keep your credit score in good shape, you must pay on time. Defaulting on a loan will not only put you in debt, but it can also ruin your credit score. This could affect your credit eligibility in the future.
  • Be careful how you use your credit cards. This is because credit cards normally come with a higher interest rate, and failing to return the balance within the specified time frame can lead to financial difficulties. Additionally, strive to maintain your credit usage ratio around 15%. This will assist you in increasing your credit score.
  • Verify that your credit report is continually updated. If you find an inaccuracy on your credit report, it is crucial that you contact the credit reporting companies and request a dispute. This can help you improve your company’s credit score. Furthermore, you should try to avoid harsh inquiries and unpaid accounts, as these have a bad impact on your credit report.

Bottom Line

You can considerably improve your credit score over time by using the above-mentioned guidelines. With a good credit score, you can get a loan with a cheap interest rate and other attractive features. A good credit score will always help you get the greatest deal, whether it’s for a company loan, a personal loan, or an education loan. You can quickly apply for any type of credit product online from the comfort of your own home with renowned financial institutions. Some of the additional benefits of taking out a loan from a reputable lending firm include minimal and paperless documentation.

Women with a good CIBIL score could be able to obtain a small business loan with the most favourable terms and circumstances. A high credit score might also come in helpful for women who need a personal loan for travel, medical problems, or managing wedding expenses, among other things.

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