To maintain a healthy credit score, you must check out the following points and try to improve your credit report in order to have a easy processing of a loan.
Two inquiries simultaneously are one too many
Before applying for a loan, do proper research about the loan and the process of its application. Firstly, you must be aware of your CIBIL score before applying. Secondly, enquiring about a loan from multiple banks must be avoided. Before applying, you can know about the offers of different banks through their representative who will try to persuade you towards their banks. But applying to multiple banks creates a very bad effect on your CIBIL report, which in turn makes you lose your credit score.
For example, Nehal Kaura, an HR manager in an IT firm, wanted her dream of having a home to be true by taking a home loan. But she made a mistake of applying to multiple banks. Unaware of the usual deduction in credit score due to applying in different banks, her high credit score graph shot down by many credits.
Nehal’s non-researched decision of applying in multiple banks caused her great trouble, and her good score of 750 points got down as she lost 25 points because of this situation.
How did it happen?
Whenever you submit a loan application after it gets into the lender’s hand, then the lender goes for a hard inquiry which decreases your credit score by 5 points.
Each bank made her credit score lower. If she had done her homework properly, there must not have been any chance to lower her score.
What do you mean by NA and NH?
Sometimes having half knowledge also creates many problems.
For example, Amrita a travel blogger used to travel a lot, so she applied for a travel credit card, but her application was rejected because “NA” was listed on her credit score column in the credit report. Amrita panicked after seeing ‘NA’ in her credit score column without understanding what NA meant and decided to never apply for a credit card again.
So, if you see “NA” or “NH” do not panic as it just means that you don’t have a credit score because you have no credit history within the last 24 months or there is not adequate data to derive your credit score.
Some banks still do not trust the beginners, and many have started trusting.