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How to improve CIBIL score after loan settlement

Wondering what a loan settlement is? Well, loan settlement is negotiating with the bank to waive some debt and make a full and final settlement. It is also known as "debt resolution," "debt settlement," or "debt relief." It is believed that loan settlement is usually done between the bank and the borrower, but the truth is otherwise. Visit, https://www.jllhomes.co.in/news/2022/12/05/how-improve-cibil-score-after-loan-settlement

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How to improve CIBIL score after loan settlement

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  1. HOW TO IMPROVE CIBIL SCORE AFTER LOAN SETTLEMENT?

  2. CLEAR YOUR DEBTS Unpaid dues on your credit card or loan could be a big drawback, resulting in a poor credit score. Therefore, clearing all your outstanding bills is an important aspect when you aim to improve your CIBIL score after loan settlement. The more regular you are about clearing your dues, the better your CIBIL score gets.

  3. KEEP USING CREDIT CARD Yes, even if you have a bad CIBIL score, you should continue using credit cards as it is the only way to improve it. However, you need to pay your credit bills on time, without fail. Discontinuing or keeping the credit dues outstanding for a longer period will decrease your CIBIL score. Moreover, the interest will keep piling up on the dues. Hence, you must limit your credit usage.

  4. AVOID MULTIPLE LOAN INQUIRIES After loan settlement, avoid taking loans for at least a year. However, in case of emergency, you can apply for a loan but one at a time. Multiple loan inquiries on your CIBIL report will portray you as credit-hungry. These inquiries on your report will drop your credit score drastically, and your past record of loan settlement will further make the lender unsure about approving a loan.

  5. KEEP A HEALTHY MIX OF CREDIT The type of loan you take out can also affect your CIBIL score. There are two main types of loans: secured and unsecured. A secured loan is used to purchase an asset, while an unsecured loan is used to invest in depreciating assets. A healthy credit mix gives lender the idea that you are trustworthy and have a good capacity to repay the loan.

  6. CONVERT YOUR ACCOUNT STATUS FROM "SETTLED" TO "CLOSED" Whenever you plan to settle your loan, it is important that you negotiate with your lender to close the account and not settle. The settlement of the loan indicates that the borrower was short on money and has not repaid the entire amount, making the lender bear the loss which indirectly drops your credit score, ruining your portfolio. Visit, website for more details

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