Wednesday, 30 March 2016

How bad credit can tow away your dream car?



In this day and age where every conceivable transport you take to work is choc o block, getting your own car is no longer a luxury. Not only can you take your car to work, it becomes a huge relief for your family as well as they know you are on a safe ride. Not to mention the joy rides you can take with your loved ones at your own will!
If you are dreaming of getting your car and are researching what may be the best options for you, here is something you need to right away, and no we are not talking about saving up for your car! Apart from augmenting your savings, you need to improve your cibil score as bad credit can tow away your dreams of owning of your own set of wheels. Here are the steps you need to follow to increase your CIBIL score before you go ahead and book that car of your dreams.
Check your CIBIL report
First things first you need to know where you stand. So get onto to the CIBIL website and follow the instruction to lay your hands on your CIBIL score and CIBIL report. If you are at a level of 750 and above you have little reason to worry. However, if your score is below the level of 750, you need to make some efforts to bring it at a satisfactory level.
Are errors pulling your score down?
If you are fairly sure that you have been doing things right as far as credit behavior is concerned, look out for errors in your CIBIL report. Sometimes due to the volume of data that banks handle wrong information may be passed on to credit bureaus. There may also be a case where a banker may not have closed a loan account that you have already repaid in full and your CIBIL report may be showing that you are a defaulter. If you spot any of these errors in your CIBIL report you will have to raise a dispute with CIBIL. Dispute resolution may take up to a month depending upon the nature of the error, so make sure you have that kind of time buffer.
Increase your CIBIL score
If you intend to buy your car in about six months to an year from now, you have enough time to spruce up your CIBIL score, just in case you have made some errors with regards to the way you have handled credit. This needs to be rectified right away so make sure you go about making timely repayments on all your outstanding loans including your credit card. That is half the job done. Next, ensure that your credit utilization or the amount of credit you have used as compared to the total amount of credit made available to you is between 30-40%. Finally, do not apply for any other loans or credit cards in quick succession just before you make an application for a vehicle loan. This will make you seem credit hungry and will not put your case in good stead when lenders are considering your loan application.
 Do bear in mind that the RBI, the central banking authority has made it mandatory for all banks to consider the CIBIL report of an individual as a part of their credit assessment process. Thus if you do not have a satisfactory CIBIL score, it is likely that your loan application can be rejected at the very beginning.
Research before your purchase decision
Armed with a good CIBIL score, you are ready to check out lenders and compare car loan interest rates. Before you approach a bank, make sure you have done adequate research yourself. You can use the services of various web aggregators who provide auto loan EMI calculators and comparison charts that will help you make an informed decision.
Also make sure your papers for your car loan application such as salary slips, identification documents and the likes are in order so that your loan application can be processed swiftly in a hassle free manner. Once you have a good CIBIL score you will also be at a vantage point to bargain better with your lender on your car loan interest rate.
A trustworthy customer is always a prized catch for any bank and a good CIBIL score may just be your ticket to a car loan at an attractive rate of interest. Once your loan goes through it is only a matter of time till your dream car arrives at your doorstep! So enhance your credit score and get ready to be known as a car owner!


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