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My Car Loan Was Rejected Due To Low CIBIL Score, What To Do?

My Car Loan Was Rejected Due To Low CIBIL Score, What To Do?

When You Need A Car With A Low CIBIL


We recently got an email from reader Zahid who is interested in a car loan, but ran into some issues.

From: Zahid ********* <**********>

Message Body:
Dear Sir,
I owe a credit card from 05/05/2017 with limit Rs 29000. I paid only the minimum dues per month.  Recently I applied for car loan but they rejected it saying that I have a low CIBIL SCORE (665).
Later I searched the internet and found that paying only minimum due is a dangerous step as it lowers the CIBIL SCORE.
I now cleared all the dues.
Please let me know how long it will take to improve my score. Also please guide me how to improve it.

Thanks and Regards

What To Do

Hello Zahid,

Thank you for your email. It’s not quite true that paying only the minimum amount due lowers your CIBIL score. In fact, keeping on time payments in any amount is a good sign you are a responsible borrower. The only way your CIBIL would lower by paying a minimum amount is if you allow interest to build thus reducing your available credit. The best method is to not carry a balance at all, but to routinely charge amounts on your card each month that you know you can pay in full by the time your bill arrives. When you pay in full, it reflects well on you as a borrower. 
Improving your score involves following that step, as well as opening new lines of credit but not over extending yourself, and being patient. Patterns of good credit behavior over time are what build good scores. Also eliminating errors on your report and not utilizing more than 20% of your available credit will help. Visit our backlog of articles for improving CIBIL for vast amounts of information. 
Best of Luck,
CreditSmart Staff CreditSmart

1 Comment

  • Hi i owe teo credit cards bit i have re payment issue since 6months for 70000 my cibil is going down due to this if i repay my cibil score will get more or no planningfor a personal loan so

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