Can you get a Loan with Credit Score of 550?

For a loan application approval, you need to have a good credit score say above 750 or at least 700. However, with a score of 550, there would be only few banks interested to provide a loan, if one is willing to give a loan it will be at a very high interest rate. There are many ways to increase CIBIL score. The first measure is to study the credit report, in case it has any errors. Sometimes fixing of errors related to payments can correct your credit score to a higher one.

Influence of Credit Behaviour on Score

Your repayment history, mixture of credit, enquiries, utilization of credit, and duration of credit services influence the credit score. If you pay all EMIs and credit card bills on time, then you will be able to raise your CIBIL sore. Also, reduce liabilities and keep a mixture of credit such as secured and unsecured loans, active credit cards etc.

Longer tenure for credit and loan raises your score in case payments are made in timely manner. Limit your credit enquiries as too many of these would affect the CIBIL score. Soft enquiries once a year is considerate. If you have a low score of 550 or similar then there are low chances of getting a loan, also the rate of interest would increase for any loan approved.

Thus, you must try to maintain a better credit score that is acceptable by banks and NBFCs to get a loan at reasonable interest rates and loan program terms and conditions.