Timely payments of credit card bills and loan EMIs enhance your credit score. Missed payments lead to defaults recorded on your CIBIL report, affecting your ability to secure future loans or credit cards.

Debt defaults happen when you fail to meet repayment agreements, typically over several weeks or months of missed payments. If you have a history of defaulting, seeking a new loan can be challenging.

Despite the term "CIBIL Defaulter" being a misnomer, poor credit scores from defaults limit your chances of getting personal loans. However, there are ways to approach this situation:

Some NBFCs and digital lenders provide loans to those with poor credit scores but typically with higher interest rates due to associated risks.

Consider expanding your loan search. Platforms like MyMoneyMantra offer options from various lenders, factoring in your credit score, income, and eligibility.

Your employment history and income level can mitigate a poor credit score's impact. Lenders also evaluate factors like repayment capacity and job stability. Applicants from stable employment backgrounds (like government or MNCs) are favored due to income certainty.

Follow these strategies to enhance your loan approval chances:

1. Add a co-applicant: Including an earning family member can reduce credit risk and bolster your application.
2. Include a guarantor: A guarantor assumes repayment responsibility, reducing lender risk.
3. Good salary: A higher income boosts your repayment capacity, offsetting credit score issues.
4. Loans from NBFCs: These loans cater to those with poor scores but have higher interest rates.
5. Peer-to-peer lending: Although emerging, this option usually entails high interest and smaller loans.
6. Digital lenders: Lenders like Moneyview and KreditBee are lenient with different models.
7. Secured loans: Offer collateral to secure loans, allowing for less emphasis on credit scores.

Secured loans viable for low-score applicants include:

• Loan against property: Utilize real estate for larger loans and longer terms.
• Gold loans: Use gold assets as collateral, disregarding credit score.
• Loan against securities: Leverage investments like mutual funds for loans, based on LTV ratios.

Improving your credit score through debt repayment and timely commitments is vital long-term. Enhancing your creditworthiness will greatly benefit future loan applications.