Improving Your Credit Score to Help You Get an Overseas Education Loan
Getting an
education loan for overseas study is an important decision. Based on the
country of study, the course, course duration, University/ institution and the
location, the loan amount may vary from around 20 Lakhs to more than 1 Cr. In
such cases, the right education loan becomes the most important factor in the
education process.
The financial
institution granting Student Loans for Studying Abroad not only check the academic score,
reputation of the applied institution, and the co-borrower’s salary, but also take another factor into account-
The Credit Score. This article talks about the credit score and provides the
different ways in which your credit score may be improved.
What is a Credit Score?
A
person’s entire borrowing history, from credit card bill repayments, various
kinds of loan repayments, and even such things as payment of rent comprises
his/ her credit history. This credit history is compiled into what is known as,
the credit score by third-party organizations, approved by the Reserve Bank of
India. There are 4 different organizations which provide a Credit Score:
1.
CIBIL
2.
Equifax
3.
High Mark
4.
Experian
Of
these, the CIBIL score is the oldest and most frequently used credit score of
all. The credit score is a measure of a person’s ‘creditworthiness’ or a
measure of how efficiently that person may repay a loan. It is a 3–digit
number, between 300 and 900, which will provide an effective picture of the
borrower’s financial history. Hence, before granting any kind of loan to a
person, be it a home loan, a car loan, and most especially, if it is an
overseas education loan, the borrower’s credit score is checked by the lending
organization.
What Benefits Do You Get With a Good Credit Score?
If your
repayments have been on time, the loan installments paid back before the due
date, etc. then your credit score will be on the higher end. However, if you
have a history of bad debt and bankruptcy, your credit score will be low.
Having a high credit score will be of immense importance when you apply for
your overseas education loan or for that matter, any kind of loan.
Your
loan application will be processed faster and the disbursement will be quicker,
with easier loan sanction. You might also be eligible for low interest loans
which will be immensely helpful during EMI repayments. Hence it is very
important to keep a high credit score.
How Do I Improve My Credit Score?
There
are various ways of improving your credit score, some of which are enlisted
below. It is not that if you have
defaulted on your repayment once, your credit score will never improve.
1.
Make your EMI payments on time
Suppose
you are on a home loan and in the near future plan to get an overseas education
loan, then you must ensure that all the repayments that you are going to make
for the current loan must be as early as possible. Early or on time loan
repayments are sure shot ways to improve your credit score.
2.
Clear off any Bad Debt that you have
After
you make your Online Loan Application for Abroad Studies, the first thing that the bank/ NBFC will do is to check
your credit score. If you have an existing debt that you haven’t repaid, now is
the time to pay it off. Although your credit history will already have featured
the pending amount, the repayment will ensure that you are cleared from your
stint of not having paid back the debt amount.
3.
Pay all your Bills on time
This
factors in all your domestic, electricity, rent and phone bills too. Bill repayment
is held as a sign of your responsibility as a borrower. When lender
organizations ask for your credit history, they are looking for someone
responsible enough to repay their credit on time. So your bill repayment
history also factors into your credit score.
4.
Managing Your Credit Cards
Your
credit card payments need to be done on time. Also, there is no need to open
unnecessary credit accounts. Another thing is to maintain even those accounts
that you are not using and not shutting them down. This may led to a hard
inquiry which is reflected in your credit score.
All
these measures, if heeded will result in your credit score improvement which
will help you get your education loan with ease. If you need expert Assistance for Overseas Education Loan Process
you may contact Elan Overseas Education Loans, which has been successfully
helping students get their education loan for abroad studies.
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