Credit history
Your credit report is the first thing a lender reads.
Before a lender looks at your plan, it looks at your repayment record. Here is how to see what they see, and what to fix first.
Six checks
What to do before you apply
- 01
Get your own report first
Credit bureaus in India are required to give you one free full credit report a year. Request yours before any lender sees it, and read it line by line.
- 02
Look for errors
Accounts that are not yours, loans shown as open that you closed, and wrong dues are all worth disputing with the bureau and the lender that reported them.
- 03
Clear overdue amounts
Overdue instalments and card dues weigh most. Pay what is overdue and keep payments regular for the months that follow.
- 04
Watch how much credit you use
Using most of your card or overdraft limit all the time reads as stress. Keeping utilisation lower helps.
- 05
Space out applications
Each formal application usually leaves an enquiry on your report. Many in a short time can look like desperation, so apply with a plan rather than to everyone.
- 06
Remember the business and the owner
For smaller businesses, lenders often look at the owner's personal repayment record as well as the business. Both are worth checking.
A good score is only one part of the file. See the other common reasons for a decline or check whether your cash flow covers the repayments.
Questions
Credit score: common questions
What credit score do I need for a business loan?
There is no single cutoff. Each lender sets its own requirements and also looks at cash flow, documents and security. Common bureau scores run from 300 to 900, and higher generally helps, but a good score alone does not guarantee approval.
How can I check my credit report for free?
Credit information companies in India are required to provide one free full credit report a year on request. Ask each bureau for yours and compare them, as the details can differ.
Will checking my own report lower my score?
Checking your own report is generally treated as a soft enquiry and does not count against you the way a lender's application enquiry can.
Can I get a loan with a low score?
Sometimes, but on stricter terms or for a smaller amount. Fixing the causes first, then applying, usually gives a better result than applying immediately.
General information only, not financial or legal advice. VEDAM Capital is an advisory firm, not a bank or NBFC, and does not guarantee approval or funding.
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Credit history holding your case back?
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