How Does a Gold Loan Affect Your CIBIL Score?

A gold loan is a credit facility that can help you meet the financial requirements to purchase gold. Your credit score reflects your responsibility in repayment and your credit health. A gold loan can affect your credit score in many ways. When you make your gold loan payments on time and in full, your credit score will increase. After a lender accepts the for your gold loan, over time, you will have to repay the amount. Let us look at the many ways in which gold loans can affect your credit score.

Applying for a Gold loan

When you apply for a gold loan, or any other credit, the lender makes a hard inquiry where they make a request for your credit report from the credit bureaus. They will then assess if your application can be approved or not. Every hard inquiry will be reflected in your credit report and your credit score reduces with every hard inquiry.

Payment of Gold loan amount