A CIBIL score is built only when an individual has taken a loan or a credit card. If he has not taken any of these, then there will be no history in the credit report. To build a good credit, there are different credit builder services which an individual can opt. The credit builder services like the credit builder loans where the loans advanced by the banks are deposited in the savings account of an individual. When an individual makes timely payment on the loan it builds the credit history of an individual and therefore gives a boost to the credit score. The credit builder loan offers low-interest rates to an individual. The loan like personal loans also helps to consolidate debt and pay it off at lower interest rates and help to cover unexpected expenses and contingencies.
The individual who is having a bad credit score or when he is starting out with no credit score then credit builder services act as a tool to build a credit score. But if there is a bad credit score then the individual should take steps to improve the credit score by making regular payments of EMI’s and outstanding balances of the credit on time.
If you’re already having a loan and you’re not able to pay its instalments on time, then there are chances that you will be defaulted in the loan. If you opted for loan or credit card settlement then it reduces your chances of getting any credit in the future. Cibil takes no payments in a negative manner.
Credit Builder is for building credit. It removes the negative impact of your credit report. To build credit, you’ve to pay previous debts.
Building healthy creditworthiness enables us to achieve financial success in a credit driven economy.