A CIBIL report shows the financial status and behavior of a borrower and is important to get a loan sanctioned. Most of the loan lenders offer loans to borrowers who have a high CIBIL score only as it defines the responsibility and creditworthiness of a borrower.
How late payments will affect your CIBIL score?
A factor like late payment of dues affects the payment history negatively which is an important part of a CIBIL report. How this late payment of dues affects the CIBIL report depends on various factors like by how many days was the payment late, though payment made late by a day makes no difference. Most lenders will only reflect late payment if it is more than 30 days if the borrower has paid all dues on time in the past.
Late payment of dues between 30-60 days generally does not affect your CIBIL score. Once the payment is complete, it is not reported in the CIBIL report, but if such delays are frequent, it will have a negative impact on the credit report. A payment which is missed for more than 90 days can have a very harmful effect on the credit report for up to 7 years.
Even though you have had a good record of timely repayments, one default may affect your reputation which in-turn will make it difficult for you to get a loan in the future.
How to ensure there is no late payment?
To have a good CIBIL report, it is important to pay your dues on time.
If you are worried about forgetting the due dates, you can simply put a reminder about it on your cell phone. Lenders also provide online alerts or send SMS on the phone as a reminder.
The borrower can also sign-up for auto-pay in which the payment is automatically deducted from the bank account or credit card on the due date which is beneficial if you often forget to make payments. The only important thing here is that there should be sufficient balance in the account because if there is not enough money, the borrower might also have to pay late fees.
The borrower can also go for weekly payments instead of monthly payments. This will be easier to handle and will also help in paying off the loan on time.
If you are in need of a business loan, Gromor finance provides unsecured loans for small businesses for up to 10 lakhs.