Creating/Improving Credit History
Credit history reflects the pattern of an individual’s credit habits and is built when one takes a loan/credit card. When one has just started their career, no history of loans or credit cards will lead to no credit history and, consequently, no CIBIL score. This can be a tricky issue at a later stage when one is in need of debt for any reason, including home loan, car loan, etc.
When a bank processes a loan/ credit card application, credit score often defines one’s eligibility towards such a loan. Thus, this can emerge as a vicious cycle, wherein no loan leads to no credit history, while a credit history can be created only through an existing loan.
However, personal loans can be availed from the banks and financial institutions based on the recurring monthly income, e.g., salary, etc. Taking a personal loan for a shorter tenure and repaying it in time can help one create a good CIBIL score.
In today’s world of high medical costs, medical emergencies can derail all the financial plans and can cause severe financial as well as psychological stress.
Instead, one can take a personal loan to meet such medical expenses, and then repay such loan in monthly installments.