Importance of credit status for loan application acceptance

0

 There is a steady increase in the number of people who are filing for loans. For those of you, planning to take loans, it is really important to understand that loan is not just about timely providing with EMIs and searching for a bank which gives the best offer. It is definitely much more than that. It is imperative, that the bank accepts your loan application when you send it. A bank or a financial institution does not accept all the loan applications subjected to them. For them to accept the loan application the receiver needs to have a high CIBIL score and at the same time should not have been a previous defaulter with a clean CIBIL report. So, the high CIBIL score is indispensable for loan acceptance.

However, what you need to understand is that there are other aspects of the CIBIL report which are of importance too. So there are the credit card account details which are also taken reference by the bank. If the credit card account shows ‘closed’ status that is well and good. But, with the ‘settled’ status, the task becomes really tedious.

What is the meaning of settled status on the credit card account?

IF there are dues left on a credit card, but the settlement done, then the credit card account status shows ‘settled’ status.

What is the implication of the status of a credit card account of the CIBIL report?

The following points will help you understand the implication of credit card account of the CIBIL report:-

  1. The CIBIL report shows the credit history of last 36 months. However, the Credit score is calculated with the details of the monetary transaction and credit history of last 24 months.
  2. If the credit report shows a settled status of a credit card, it implies that customer has partly paid the dues. However, the status will be ‘closed’ one, if the customer has completely paid the dues of a credit card.
  3. The loan application is reviewed based on the credit history of the entire report. It is not dependent only on the Credit score.
  4. Every bank has their own norms and rules as to which way they witness the credit history and decide accordingly.

What could be done to deal with the issue?

  1. It is a simple explanation that for the status to change from ‘settled’ to closed; the customer has to pay all the dues.
  2. Hence, the customer will be required to pay all the accrued dues by approaching the company.
  3. If you as a customer will pay all the dues, it will reflect on your status as ‘closed’.
  4. For this, it is really important that the lending institute provides a submission of the updated data.

Next time, when you are in the way to submit application for loan, make sure to take care of your credit card account status with priority.

Share.

About Author

mm

Money Dial is your destination to gain knowledge and earn greater returns in the world of financial market. Through Money Dial, we aim to help you sail smooth in your finances, rise high on returns and invest on success with tips, advice and market gyaan. Whenever you need a little extra help, our team of financial experts is here to guide you through the complex financial world by simplifying it and providing expert solutions to your problems.

Leave A Reply