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How a bad credit personal loan improved my CIBIL score

  Wed, Apr 26, 2017     written by : CSF-Team
Bad Credit

Credit score of an individual may be just a three-digit number, but one does not understand the significance of CIBIL score unless a poor credit score hampers one's financial plans. I am Vinay Shukla, and my experiences have taught me that score may be a make or break when it comes to applying for a fresh line of credit. Let me tell you the story of how I was able to redeem my score with a personal loan for low CIBIL score.

Improved Score

Blissful ignorance about credit usage

Till about three years back, I had no idea what my CIBIL report was, let alone any idea about a personal loan for low CIBIL score. I was happy go lucky and had little financial responsibilities living with my parents in suburban Mumbai. I had taken a student loan to complete my MBA and had landed with a decent job in a MNC. I was over the moon. What's more I got my credit card soon after and suddenly thought I had gained a lot of purchasing power. But what I had forgotten was that with power comes responsibility!

Soon I became reckless with my credit spend. While I was repaying my student loan on one hand, I was also piling up debt on my credit card. I bought expensive gadgets and loved to take my childhood friends out for parties. The fact that they envied my success gave me a heady feeling and I loved to show off! My bubble however burst a few months down to the line.

Credit karma catches up

Since I was making purchases I could not afford on my salary, my credit card bill was inflating. I had racked up debt of ₨ 45,000 on my credit card and was unable to repay the outstanding amount on time. But the worst was yet to come. My father who had just retired had a heart attack in the past year and I was called upon to pitch in with some funds. My credit card limit was close to exhaustion so I thought that a personal loan could come to my aid. But to my worst nightmare, my loan application got rejected owing to poor CIBIL score.

Thus, swallowing my ego, I went to my childhood friend Shyam who not only helped me with the funds I needed, but also proved to be a friend in need. After my father came back from the hospital I was still under shock both emotionally and financially and at a loss of how I could redeem my finances. My CIBIL report was atrocious due to my credit repayment track record and I was barely managing to repay the student loan though I had missed one payment and my credit card bill remained like a noose on my neck.

Personal loan for low CIBIL score redeems credit reputation

At this point Shyam suggested a personal loan for low CIBIL score. I asked Shyam how I could qualify for another personal loan when a personal loan application had already been rejected by a lender not so long ago. This is when Shyam told me about P2P lenders who specialise in personal loan for low CIBIL scores. I finally saw some ray of light and approached a peer to peer lending platform. These are virtual lending marketplaces where borrowers can directly get in touch with individual lenders. As and when the criteria match, lending terms and conditions can be decided upon with mutual consent.

What's best about a P2P lender is that they do not only refer to your CIBIL score and CIBIL report but also look at other criteria such as the social footprint, job security and prospects. As a result I qualified for a loan for ₨ 75,000 within a day of making an application for a loan. The money was disbursed into my account within a couple of days and I could repay the entire outstanding all at once. I also repaid Shyam and heaved a sigh of relief.

What's more, with a lighter head and now wiser about credit usage and how it impacts one’s CIBIL score, I mended my ways and built a good track record of repayment. The whole of 2016 went into repayment and rebuilding of my CIBIL score and finally after a year of hard work, I can proudly say how a good track record in the repayment of loan for bad credit score, helped me to recover my financial health. My CIBIL report is also blemish free now and I soon plan to apply for a car loan. This time I am confident that there will be no problem in my loan application getting sanctioned as I now have a CIBIL score of 785!