We will learn more in-depth how a personal loan impacts your credit score.
What is a Credit Score?
Credit score means a score that is measured with a number from 300 – 900. This number will depend on the previous loan repayment track.
How Does a Personal Loan Impact Your Credit Score?
A personal loan can fall a negative impact on your credit score. We will discuss below how personal loans affect your CIBIL Score.
1. Too Many Enquiries
When you are going to apply for a personal loan, lenders check the CIBIL score. It is ok if you have 1 or 2 credit inquiries. But, multiple inquiries will affect your credit score.
2. Running Too Many Loans
Many times, I saw the customer taking too many personal loans. Most people take the loan for luxury. But it will ruin your credit score.
3. Late Repayment
Always, pay the loan on time to maintain a healthy credit score.
4. High-Interest Rate
You should check the lender’s interest rate before taking the personal loans.