How to Improve CIBIL Score - Smart Tips

CIBIL score is the evidence of the credit history of individuals. Several lending institutions evaluate your CIBIL score to verify your creditworthiness. Therefore, you must maintain a good score, as it often determines whether you are eligible for a loan.

The CIBIL score ranges from 300 to 900, and the higher your score, the more lenders will be ready to offer you a loan. A CIBIL score of 700 and beyond is ideal for a personal loan, and anything below that can be a matter of concern. Keep scrolling to learn about some smart tricks for CIBIL improvement.

How to increase CIBIL score?

• Pay EMIs on Time

  You might think that paying your EMIs shows that you are financially responsible. However, paying EMIs isn’t enough if you are not paying them on time. Late EMI payments are reported in your CIBIL report and reduce your score.

  The best way to ensure timely EMI payments is to set up automatic transfers from your bank. But you also need to ensure that your account has enough funds to transfer. It will aid with increasing your CIBIL score and save you from incurring bounce charges.

• Reduce Credit Utilisation

  Your credit cards might have a high limit but try not to exceed 30% of the total limit. Going above 30% negatively affects your credit score. At the same time, not using your credit card can also hamper your credit score.

  You should also remember to pay the outstanding dues on your credit card on time. Apart from improving your credit score, paying credit card dues on time keeps mounting interest rates at bay. Furthermore, remember not to apply for too many loans to maintain a high credit score.

• Borrow Different Types of Credit

  When you obtain credit wisely, it can be conducive. A person who has never applied for any credit often has a low CIBIL score. In that case, a person might find it difficult to obtain loans.

  It is always recommended to add different types of credit to a portfolio. It should be a balanced mix of secured and personal loans.

• Check Joint, Co-Signed, and Guaranteed Accounts Regularly

  You are equally accountable for missed payments in joint, co-signed, and guaranteed accounts. The negligence of the joint account holder or the guaranteed individual will pull down your credit score and might make you ineligible for loans when needed.

• Look for Error in Your Credit Report

  Several people find discrepancies in their credit reports. For instance, a person’s credit score may be low because their lender hasn’t notified CIBIL about the latest payment details. Therefore, regularly check your credit report and look for mistakes.

  Several online marketplaces now offer a simple process to help you monitor your credit history. You can visit their official website to access and thoroughly check your CIBIL report. Apart from looking for errors in the existing information, you also need to check whether there are delays in updating crucial details in your report.

Ending Note

It can take time to improve your credit score. Thus, you must maintain patience. Remember that the CIBIL score won’t increase overnight, and you must be persistent with your approach.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.