Credit Scored or Credit Scared!?


Raj has recently shifted to a new job in Gurgaon. This is his 5th job and 3rd city in 3 years. Raj got a hike of 30%, relocation reimbursement and a 2 week stay in company’s guest house. In short, Raj is exuberant. To put the icing on the cake, Raj’s college buddies are planning for a Euro Trip and have asked Raj to join in.

Raj is due to get married next year and hence decides to take a trip before tying knot. So for the next few days he plans out all the itineraries with his friends; hotels, food, tickets and a 2 –day trekking at West Highland way. Being slightly off the budget Raj decides to take an unsecured personal loan with the bank in which he has his salary account. He fills in the details and awaits a reply within 3 business days as stated by the bank. 2 days later, Raj receives a message denying his loan. Raj is heartbroken and doesn’t know what went wrong. But we at KountMoney know exactly what went wrong. So let’s go through the reasons one by one.

1)   Job Hopper: Banks and specially the bank where you are applying for an unsecured personal loan are skeptical about job hoppers. Banks look for stability in their prospective borrowers. Raj has changed 5 jobs in 3 years. His average stay is around 7 months per company. Banks prefer somebody who is stable in a job or at least isn’t changing his job too frequently.

2)    City Hopper: Banks hate it when you change your location too often. Like job hopping, city hopping is also seen as a sign of instability, something that a bank dislikes. Living in a locality which is put in a negative list (localities from where the banks have high chance of defaults) by your bank can also hamper your chance of securing a personal loan. Raj has changed 3 cities in as many years; this can be a reason for rejection.

3)   Credit History: Late payment of EMIs and defaulting on loans are sure shot ways of ruining your credit score. These days all banks check your CIBIL score (Credit Information Bureau India Limited score) before lending. CIBIL score becomes all the more important for unsecured personal loans as there is no collateral. As you might have guessed by now that Raj must have had a pretty bad CIBIL score owing to defaulting a loan and late payments. Sometimes you may have a good CIBIL score but may have forced banks to either write off or settle your loan. This may again ward off banks. You can learn more about CIBIL score @ or ping us @

So, now we know why Raj’s loan was rejected. Let’s explore some other reasons as well.

4)       Too Many Financial Obligations: You might be paying your EMIs on time. You might also be stable in your job and have a good CIBIL score but still may not be able to secure a personal loan. One of the reasons can be outstanding loans on you. If the bank feels that you have way too many financial obligations to fulfil and may not be able to pay your EMIs on schedule then your loan may be rejected.

5)      Guarantor’s dilemma: If you have stood as a guarantor for a loan and the borrower defaulted then it reflects poor on your credibility and may result in rejection of your loan.

6)   Employer’s Profile: Your employer’s business  and financial stability may be a deciding factor for your personal loan. All factors remaining same, banks may prefer a borrower working for a more stable organisation. Your employer’s stable financial condition ensures stable working condition for you which in turn ensures regular EMIs on your personal loans.

KountMoney, in no way, implies that one of the above reasons WILL absolutely result in loan rejection. We just want you to be well-informed so that you can make knowledgeable decision while applying for a personal loan. Every borrower is different and so are reasons of accepting or rejecting a loan application.

To know more you can contact us @


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