To take any kind of loan, it is important that your CIBIL score is good. But, what if you have never taken any loan. Does doing this make your CIBIL score better or worse? Let's know the answer to this question in this news today. Along with this, we will also know what is the CIBIL score that is considered right to take any kind of loan.

People avoid taking loans

Often people are afraid of taking loans and prefer to pay cash for everything. Some people consider credit cards to be similar to loans and avoid using them. They think that this will increase their expenses and may spoil their CIBIL score. But, does this really happen?

Importance of CIBIL score and credit history

CIBIL score is a three-digit number that tells the credit history of a person. It decides whether a person will get a loan or not. There is often a perception that not taking a loan is better for credit history. But, not using credit facilities may not be a good option for your CIBIL score.

That is, if you have never taken a loan, then you will not have any credit history. This situation can create confusion for credit rating agencies. In such a situation, your score can be zero, which is considered a bad score. 

With a zero CIBIL score, banks may be unsure about you. That is, they may have trouble understanding whether you will be able to repay their money or not. Although this does not mean that you will not get a loan, it may affect the interest rates and loan amount.

How to create a credit history

You can improve your credit history in many ways. The easiest way is to buy things on small EMIs. Like mobile phones, washing machines etc., you can build your credit history without taking a lot of loan. Apart from this, you can also build your credit history by using a credit card.

How much CIBIL score is right

CIBIL score is measured between 300 to 900. A score of 750 or above is considered best.