WHAT IS CIBIL SCORE AND HOW TO IMPROVE IT? ❤ - Latest Information Join Our Whatsapp Group

WHAT IS CIBIL SCORE AND HOW TO IMPROVE IT? ❤

When you take a loan, repay it successfully, it will give your credit score a boost. Maintain a healthy credit mix: It is better to have a right combination of secured loans CIBIL SCORE  (such as Home Loan, Auto Loan) and unsecured loans (such as Personal Loan, Credit Cards) of a long and short tenor to build a good credit score.

How to Improve CIBIL Score - Increase Credit Score

1. Set Reminders or Standing Instructions to Repay on Time

Missing out on repayments for your outstanding debt can be a serious mistake, as it can negatively impact your . You need to be punctual when it comes to paying the loan EMIs or credit card dues. If the EMIs get miss or delayed, you not only pay the penalties but also see your credit score falling. The two best ways to avoid any delay in payments is setting reminders to repay on time and secondly by adding Standing Instructions/Orders to your bank account from where any set amount can  deducted at regular intervals.

2. Check for Errors in your CIBIL Report

You might have a good credit history, but there can be various unknown errors that might be pulling your credit score down. These errors may include incorrect personal information, wrong account details, mismatched overdue or paid-off amount, duplicate accounts, incorrect Days Past Due or Collateral details, etc. For example: you have already paid your loan completely and have closed it from your side, but it is still appearing as current due because of an administrative error. Likewise, you will have to keep a check on other errors and suspicious activities. Resolve these errors by raising a CIBIL dispute resolution online at CIBIL’s official website and witness a gradual increase in your credit score

3. Try Maintaining Healthy Credit Mix

It is always advisable to have a healthy mix of unsecured loans like credit cards, personal loans and secured loans like an auto loan, home loan. Consumers with higher number of secured loans are more preferred b the lenders, as there is collateral/security attached to it by making the borrower at lesser risk for banks. If you have a multiple unsecured loans then try prepaying them to maintain a balance between secured and unsecured loans.

WHAT IS CIBIL SCORE AND HOW TO IMPROVE IT? : watchinf this video

4. Clean all Credit Cards

Any lender seeks good and positive financial behaviour and clearing off all your credit card dues signifies this behaviour. Strategically plan to clear your credit card balances before the due date and increase your credit score. Make sure there is no numeric attached with the Days Past Due (DPD) section in your CIBIL report.

5. Avoid being a Co-applicant or Guarantor 

Avoid becoming a joint account holder or guarantor of loans, as any default from the other party will also get reflected on your CIBIL s. If the borrower defaults on loan repayment, misses or delays the repayment of loan EMIs there could be a steep fall in the CIBIL sc for both, borrower, as well as the co-applicant or guarantor

6. Avail Secured Credit Card

If you get a secured card from leading banks like ICICI Bank, AXIS Bank, SBI, etc. against a fixed deposit and repay the balance on the due date, your CIBIL will have a rise. One such card is also offered by Paisabazaar i.e. Step-UP Card.

7. Avoid Multiple Loan Applications

It is a good practice to repay the current loan before taking another one to keep your credit score away from getting low. Taking many loans at a time shows that you might have insufficient funds to pay them all. It is better to take one loan at a time and pay it successfully to give a boost to your credit score.

8. Reduce your Credit Utilization Ratio

One of the ways to improve your credit score is to not utilize your credit card to its extreme limit. It is advised to keep the CUR low, preferably within the 30% mark. Let’s say, if your credit limit is Rs. 1,00,000 a month, you should try not to exceed the expenditure from Rs. 30,000 per month. Keeping the credit utilization ratio in the range of 30% or below may not impact your credit score but if you frequently max out your credit card or maintain a high CUR (90-100%), your credit score may drop.

9. Choose Longer Repayment Tenure

When taking a term loan, go for a longer repayment tenure. This way, the EMI will be low and you will easily be able to make all the payments on time. You will keep yourself away from the defaulters’ list and will increase credit score.

10. Try to increase your Credit Limit

Never say NO, if your bank asks you to increase the credit limit of your card or you can also ask your bank for the same. It does not mean that you are going to spend more money every month rather you will have to be smart about managing your expenses. The simple trick is to have a lot more credit and keep your utilization low to leave a positive impact on your score.

faqs

What is a CIBIL score?

A CIBIL score is a three-digit numeric summary of an individual’s credit history, ranging from 300 to 900, that indicates their creditworthiness.

Why is the CIBIL score important?

The CIBIL score is important because it helps lenders assess an individual’s creditworthiness and determine their eligibility for loans or credit cards.

How is the CIBIL score calculated?

The CIBIL score is calculated based on factors such as credit history, repayment behavior, credit utilization, credit mix, and recent credit inquiries.

How can I check my CIBIL score?

You can improve your CIBIL score by making timely payments, reducing credit utilization, maintaining a healthy credit mix, and avoiding defaults or settlements.

Additionally faqs

Does closing a credit card affect the CIBIL score?

Closing a credit card may impact your credit utilization ratio and the length of your credit history, which can have some impact on your CIBIL score.

Can I improve my CIBIL score by taking more loans?

Taking more loans alone may not improve your CIBIL score. It is important to demonstrate responsible credit behavior, including timely repayments.

Can a good CIBIL score guarantee loan approval?

While a good CIBIL score increases the likelihood of loan approval, lenders consider multiple factors like income, employment, and existing debt before approving a loan.

Does checking my CIBIL score frequently impact the score?

No, checking your own CIBIL score does not impact your credit score. It is considered a soft inquiry and does not have a negative effect.

Can errors in my credit report affect my CIBIL score?

Yes, errors in your credit report can negatively impact your CIBIL score. It is essential to review your credit report regularly and report any discrepancies for correction.

How long do negative remarks stay on a credit report?

Yes, errors in your credit report can negatively impact your CIBIL score. It is essential to review your credit report regularly and report any discrepancies for correction.

Can I improve my CIBIL score quickly? 

Improving your CIBIL score requires time and consistent responsible credit behavior. There are no quick fixes, but positive changes can be seen over time.

cocnlusion

your CIBIL score is an important factor in determining your creditworthiness. By practicing responsible credit behavior, such as making timely payments, keeping credit utilization low, and maintaining a good credit mix, you can gradually improve your CIBIL score. Regularly monitoring your credit report and rectifying any errors are also essential steps to maintain a healthy credit profile.

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