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Worried About Low CIBIL Score for Business Loan? Check Out the Following Steps

Pay Your Business Bills on Time

Paying the business outstanding bills on time as well as any EMIs is extremely crucial. It not only helps to improve CIBIL score but also helps to maintain a good relationship with lenders and vendors.

Keep Debt Utilization in Check

If you are using revolving credit, like an overdraft account, keep the utilization ratio below 30%. A higher percentage of debt utilization indicates higher dependence on credit, which impacts your CIBIL score and creditworthiness.

Avail Short-Term Business Loan and Repay EMIs on Time

Taking a short-term business loan- the amount well within your repaying limits, and repaying EMIs on time demonstrates your responsible credit behavior. It translates into an improved CIBIL score for availing of a business loan in India. Use the business loan calculator to determine the EMI amount.

Don’t Cancel Old Business Credit Card Account

Credit history plays a crucial role in fixing up the low CIBIL score. If you cancel the old credit accounts, your credit history will be erased and cannot be included while calculating the CIBIL score.

Old business credit card accounts that have a stable credit history and reflect your business’s creditworthiness help you to get a low business loan interest rate.

Rectify Any Errors in Credit Report

A simple error in the credit report can impact your CIBIL score negatively. As a business owner, you must monitor your business credit report and look for any errors or inaccuracies. If you found any, take steps to rectify the error and report it to CIBIL.

Alternative Sources of Funding:

If you urgently need funds, and your CIBIL score is low, you can look for alternative options of funding such as an overdraft facility secured against fixed deposits, a secured business loan against property, adding co-applicants who fit the required eligibility criteria, or finding an investor who may be willing to invest their money in exchange for a share in the business. You may also consider asking a close family member with a stable income and good credit score to apply for a personal loan on your behalf.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us


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