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.
Also check : Todays Gold Price
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
When you make the payments for your loan in time and in full, your credit score will increase. If you pay the loan on time, it shows that you are responsible and have good credit behavior. This makes it attractive for a lender and the chances of you getting a loan are higher. You may even get a low interest rate on your gold loan if you have a good credit score.
When you default on the payment and cannot repay the gold loan amount, the delay is reported to the credit bureaus and the data goes into your credit report. This will reduce your credit score.
FAQ's on How Does a Gold Loan Affect Your CIBIL Score
- Where is a hard inquiry reported?
Every hard inquiry will be reflected in your credit report and your credit score reduces with every hard enquiry.
- Can I buy Gold online?
Yes, you can buy gold online and it will be delivered to your address.
- Is it safe to buy Gold online?
Yes, it is safe to buy Gold online.
- How does a default in Gold loan payment affect my credit score?
When you default on the Gold loan payment, the delay is reported to the credit bureaus and reduces your credit score.
- Can I buy Gold through payment apps?
Yes, a lot of payment apps allow you to buy Gold.
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