5 Ways to Increase CIBIL Score After Job Loss_Banner_WC
Improve CIBIL Score After Job Loss_WC
Unforeseen financial situations, such as a job loss, can arise any time. If you too have been one of those who lost their job due to whatever reason, you can use this time to prepare better and bounce back with a fresh perspective. And while you are at it, make sure you do not let this phase hamper your credit score.
It is of course understood that increasing your CIBIL score right after a job loss would not be the first thing on your mind. However, this is the time your credit score becomes most vulnerable due to the actions you may be forced to take being temporarily unemployed. Having said that, in this article, apart from looking at how to increase or even maintain your CIBIL score, we will also share with our readers, details on why credit score matters in a job search and how a poor credit score leads to a job rejection.
Does Credit Score Matter in Job Search?
Companies check CIBIL scores or reports to confirm an applicant’s identity as well as protect existing customers and employees from fraudsters. Further, an individual’s credit report gives a detailed picture of how well they handle credit and money and therefore, how much they can be trusted with key responsibilities.
So, can a bad credit score lead to a job rejection?
Well, if your employer is keen on hiring people who can handle their finances well, a bad credit score can certainly take an offer away from you. If you are someone who has recently lost a job, you cannot afford to miss a job offer because of your bad credit report. Therefore, it is crucial to learn how to increase CIBIL after a job loss.
It must be highlighted here that pulling out credit reports is a tricky task that requires both time and money. Therefore, companies almost never pull out credit reports of all applicants. They only pull out credit reports of those with whom they are keen on working. Furthermore, not all companies do this. In any case, it is a smart choice to improve your credit score nevertheless.
People Also Read: How to Check, Calculate, and Improve CIBIL Score?
What Impact Does Income Have on Credit Score?
Does income impact your credit score? The answer is no. An individual’s credit report does not even mention their income, and income does not have a direct impact on a borrower’s credit score. However, income impacts a borrower’s purchasing power and their ability to repay debt, both of which have a direct impact on an individual’s CIBIL score. Thus, in simple words, income does not have a direct impact on a borrower’s credit score. However, it does have an indirect impact on it.
The next question is how to build a credit score after a job loss. Our next section answers this question.
Simple Tips on How to Improve CIBIL Score After Job Loss
Here are a few simple tips that borrowers can follow to increase their credit rating after a job loss.
Clear All Payments on Time
Your credit score is very greatly influenced by your payment history. If you have missed paying credit card bills and EMIs in the past, your credit score would have gone down. To build your credit score, make sure to clear all credit bills, EMIs and utility bills on time. Set up reminders and auto-payments if you tend to forget due dates. Do this for a few months straight and you will see a positive difference in your credit rating.
Don’t Apply for New Loans and Credit Cards
If you are working on improving your credit score, limit your applications for credit cards and loans. Too many loan applications show you as credit hungry and this has a negative impact on your credit rating. Every time you apply for a loan or credit card, your lender enquiries about your credit score. The enquiry they make is called a hard enquiry and every hard enquiry impacts a borrower’s credit score negatively. So, refrain from applying for new loans and credit cards if you are trying to build a credit score.
Clear Off Debt
If you have too many loans running and you are also using several different credit cards, an easy way to improve your credit score is to clear off some of your debt. Clear off the small loans, if you can. This will make your credit score look better. However, do not close the loan accounts that you have cleared as this will lead to a loss of credit history and this will have a negative impact on your credit score.
Check Your Credit Report
Lastly, to improve your credit score, check your credit report regularly. All borrowers must check their credit scores at least once every year. However, if you are working on building your credit score, you must check your credit report once every six months. Sometimes, errors creep into a borrower’s credit report and impact their report negatively. Rectifying these errors takes time. Therefore, one must check their credit report once every six months for all kinds of errors and if one does spot any errors, one must report them immediately.
In today’s world, where everything is uncertain, it is not uncommon for people to lose their jobs. If you have recently lost your job, do not be disappointed. What has happened to you can happen to anyone. So, get over the disappointment as soon as you can and get back on the battlefield. Line up interviews and polish your resume and cover letter, and do also remember to build an excellent credit score before applying for your next job.
5 Ways to Increase CIBIL Score After Job Loss_RAC_WC