What is Credit Profile?
A profile bank creates for loan applicant.
Which Parameters drive Credit Profile?
Income, Education, Residence, Age, Employment/Business, Employer, Tax history, Recurring liabilities etc.
Why Credit Profile needed?
To judge the candidate for loan application and maintain his credit history that is useful for assessing credit worthiness in future.
Who maintains Credit Profile centrally?
Credit Information Bureau (India) Limited - known as CIBIL.
How credit profile affects loan application?
Loan applicant's credit history is checked with CIBIL, if applicant history s good then loan is sanctioned easily else hardly or not.
How credit profile affect interest rates on loans?
Banks issue detailed loan eligibility requirements, more closer your credit profile matches these eligibility norms, lower will be your interest rates on loans.
How to improve Credit Profile?
1. Gain knowledge : Find out eligibility requirements for a loan product, then go through those parameters of your credit profile which deviates from those requirements. For eg. if for a particular loan amount, minimum monthly income should be Rs. 30000/- but yours is Rs. 20000/-, then find a co-applicant(spouse, brother or friend) and include his/her income to make your total monthly income above Rs. 30000/-.
2. Maintain Good Tax history
3. Pay your credit card bills, always on time.
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