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How to Improve Your CIBIL Score!

How to Improve Your CIBIL Score

How to Improve Your CIBIL Score!

You might have lost your credit score and were looking for ways to improve it. If you’re here to read this article, you definitely need information about credit scores and their improvement. 

 Don't worry; whatever your issue, you can get answers to all your questions.

 Let’s start!

 First, if you know about the CIBIL score, it’s good if not will define it here for you.

 

What is the CIBIL Score?

CIBIL is one of the four credit bureaus in India that creates reports dependent on your financial transactions. CIBIL score is generally how you handle your finances like-

  • On-time payment, 
  • How long you’re paying
  • Taking loans on credit cards, 
  • How many due you have in a specific period, 
  • How regular you’re in on-time payment of dues, 
  • And other financial details. 

 Based on this, your CIBIL score is calculated by the CIBIL credit bureau to help banks and financial institutions provide them an idea of whether to give a loan to this candidate or not or provide with the risk factor.

 Generally, lenders classify the candidates based on their credit scores. Lenders provide offers based on risk factors on certain loans. The lower the risk, the low rate of interest is offered to that candidate. 

 

What's Considered As a Good Credit Score?

CIBIL scores range between 300 and 900. CIBIL score close to 900 is considered an excellent score, while a score between 300 to 549 is deemed poor. A score between 550 to 650 is considered to be fair. Lower credit score can be improved if you pay your dues on time. 

You need to understand the various factors affecting your credit score and take conscious measures to tackle them. Credit age, missed dues, on-time payments, Outstanding credit card balance, Too many loans/credit cards, and High credit usage affects your credit score. 

 

What are the Major Issues with Credit Information Report?

Generally, there are two primary issues with a credit information report:

  1. Improper or inaccurate information is shown on the credit report.
  2. Defaults on the payment caused due to:

 

  • Real financial hardship
  • Missed dues due to relocation to the interstates or countries.
  • Missed dues on none recipient of statement.
  • Disputes with the lender based on fees or charges or fraud.

 

How to Increase CIBIL Score?

Having a good CIBIL score is a blessing for the candidates who are in urgent need of a loan either for personal or home or any other loans. If you have dropped your credit score because of any reasons. It's time for you to work on it. There is no rocket science in these to improve your score. You can do this easily with time and constant efforts you can improve your credit score. 

 

Let’s discuss here some of the points that can help you in improving your credit score. 

 

Check Your Credit Report

It's the first step which ensures and relaxes you about your credit report. Frequent checks and keeping an eye on credit reports will tell you two things that are essential for your credit score. 

 

Firstly, you can check the reason for the drop down of your credit report whether it may be due to loan or credit dues. Secondly, it will tell you the information that is recorded in the credit report.

 

You can always check for any delays or wrong information that is affecting your credit report and approach the bank or CIBIL to update or correct  the information. 

 

Make Corrections to Errors

Now you have checked your credit report, it's time to check for errors and approach the CIBIL website and ask them to correct the errors. If you determined the transaction was out of your knowledge. If any dispute you find you can act on that within 30 days and correct the same.

 

Keep an Eye on Your Credit Utilization Ratio

Don't do over transactions for all your needs. Maintain a credit utilization ratio up to 30% or less than that. It reflects a good impact on your credit report. Whatever transactions applications you do in your credit cards or financial queries will get recorded in your application. 

 

Moreover, don't apply for a credit card after getting rejected, wait for some months to apply again or after improving your credit score you can apply again. Applying so many times to different banks will have a negative impact on your credit score.

Every time when you apply or do any queries the bank will ask your CIBIL score and will get recorded in the report. Frequently applying for credit cards and loans shows your credit hunger.

 

Pay your Loans

If you're struggling to pay your loan EMIs then you must approach your lender to change the EMI structure that will make it easier to pay on time. Making priority of loans and paying on time will benefit borrowers in the long run .

 

Don't Cross your Limits

Coming close to your maximum limit is not at all good for the borrowers because it badly affects your credit score. You should also ensure that you are not paying back only the minimum amount due on your cards, you need to pay back the entire amount or at least a sizable amount. Do not try to settle a credit card or loan that will allow them to close the debt for an amount that is lower than the actual amount due. This will also get recorded in your credit report and in turn badly affect your credit score.

 

Keep the Borrowing to a Minimum

Don't ever try to cross the minimum credit limit or close to the maximum limit. It will show that your credit is hungry and banks provide you a loan with a higher amount. Take loans that are sufficient for you, not more than that.

 

Get a Mixed Bag of Credit

 

Don't go only with the unsecured loans instead taking secured and unsecured both types of loans will help you balance your credit score. Otherwise, candidates with too many unsecured loans for them banks are considered credit hungry and offer  with high interest rates. Credit cards are also considered as unsecured loans.

 

Look for Joint Applicants

Joint applications of loan will help you to build your credit score. At the same time, if your applicant doesn't pay on time then the due will also get recorded in your credit report and affects your credit score. So consider only the candidates who pay on time for any future loans you take.

 

You can repair your credit score again but it takes some months of time. And in that period if you meet with any emétgency then you will get loans at high interest rates.

 

Go with Different Types of Credit

To build your credit score, taking credits is very crucial because the candidates who don’t have any credit cards with them will also have a low credit score. So taking different types of loans such as secured, unsecured, short term loans, and long term loans and paying these loans on time will help you get a good credit score in the long run.

 

Conclusion

Credit score plays a primary role to get loans now and in the future with low interest rates. Poor credit score will make you get loans at high interest rates.

 

If you want further information on credit score and loan opportunities available to you. Kindly get in touch with us. We are glad to assist you round the clock.

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