What is the Minimum Credit Score Required for Lendingkart’s Business Loan?

The establishment and expansion of a business require a lot of hard work. Here, one of the most crucial aspects is fund acquisition. Whether running your current business operations or expanding the empire, funds are centric. While established businesses often have a backup of funds, instant business loans are equally important for any business, irrespective of their size. 

This is when your credit score can make or break the deal. Since loans are common in a business, you must maintain a good credit score to be eligible for instant business loans.

Read on as we discuss how the CIBIL score is affected and the minimum CIBIL score you need for Lendingkart’s business loan. So, read on to learn more.

What is a Good CIBIL Score?

CIBIL (Credit Information Bureau of India Limited) score is a three-digit score ranging between 300 to 900. It is a score backed by individuals and companies that explains their creditworthiness. Your credit score is a summary of your credit behaviour, including credit history, ratings, etc. The higher your credit score, the better your chances of receiving loans.

What is a good credit score? Well, credit scores above 700-750 are usually considered a good score. You can have a better chance of securing a loan with a score above 700. Excellent scores are the ones above 800. The lender, your bank/ NBFC, will assess your creditworthiness based on various factors before approving a loan amount. Here is a table below that quickly explains credit score:

Minimum CIBIL Score for Lendingkart’s Business Loan

Different lending institutions may have different benchmarks set for instant business loans. When seeking a business seeking a loan at LendingKart, a score above 700-750 is regarded as a good score. Various factors may decide the creditworthiness of a business. To learn more about the creditworthiness for business loans at LendingKart, you may contact us today!

What Factors Affect CIBIL Score?

Now comes the most crucial question: what affects your CIBIL score? Here, we have discussed various factors that can affect the credit score of a business or an individual:

• Loan repayment habit
  One of the factors that affects your credit score is loan repayment history. Businesses that have that story of repaying their loans on time without missing EMIs usually have good credit scores. On the other hand, if you have unpaid debts, it can be a poor sign.
  

• Large debts
  Borrowing loans can be helpful in times of need. However, if you have multiple loans running simultaneously, your credit score may be affected. Once you have repaid various loans, the score may improve.
• Credit utilisation
  If you tend to utilise 100% of the credit extended to you, it is a sign of credit hunger. The best idea is to try to limit debt utilisation to only 30% of your income. It can help keep your credit score in a good bracket.

Can I Improve my CIBIL Score?

Do not worry if you are not on the list of 700+ credit scores. There are certain ways to improve your creditworthiness. 

• Utilise credit smartly
  The way you utilise credit can impact your credit score. For instance, if you have credit cards, try to limit the usage to 30-40% of the card’s limit. Utilizing anything beyond this limit, especially over 70% of the limit, can leave a negative impact. You may pick a card with higher limits or have multiple cards to avoid going above the 30-40% card limit.
• Repayment of the outstanding amount
  Merely paying the minimum balance repayment requirement can be a bad idea. If you carry the repayment burden to the next month, it can be a sign of poor fund handling and thus affect your credit score. Try to only utilise what you can easily pay off in a month. 
• Avoid loans
  Until you have a good credit score, you should avoid seeking loans. Applying for a new loan means more checks of your creditworthiness, which may further impact your credit score. The best way out is to avoid credit applications for a year or two if possible.

Conclusion

CIBIL scores are a representation of a person’s or business’s credit habits. Having a good CIBIL score can let you easily get a loan. However, even if you have a low CIBIL score, you may get a loan approved, but it may be at a higher interest rate. You may download our loan app to check more details. To learn more about your creditworthiness at LendingKart, you may contact us today!