Improve CIBIL Score

improve cibil score

Your CIBIL score playS a significant role in getting your loan approved. It is the score which represents your credit worthiness and reveals your credit history. Through this, lenders, banks, organizations, and companies know your credit records. It helps them to decide whether to approve your loan or deny it on the basis of past credit information or history.

Now the CIBIL score mainly range between 300 and 900. But which score is regarded as the good one and which one is the bad score. The above-mentioned table will explain this to you. Let’s have a watch out at this credit score list.

Scores in Between 300 and 580 – Leads to denial of your loan. And if a loan is granted then very high-interest rates will be charged on it.

Scores in Between 581 and 650 – Possibility of loan approval is there but still the interest rates will be higher.

Scores in Between 651 and 710 – Loan will be approved while the interest rates will be moderate.

Scores in Between 711 and 750 – Loan will be approved while the interest rates will be competitive.

Scores in Between 751 and 900 – Loan will be granted for sure and lowest interest rates will be implemented.

So from the above-mentioned table, it is clear that if you are having good CIBIL scores that mean you have good credit record and loan will be easily approved and at a lower interest rate. But the lower the the credit score, the more chances will be of loan denial and higher will be the interest rates.

Steps to boost your CIBIL score:

  1.  It is important that you check your CIBIL report at least once a year. This is because if there is any kind of error in the report then you may get it correct. The errors may include wrong credit limits, late payments or the presence of loans or credit cards that do not belong to you.
  2.  Pay all your bills on time to have a good record. Because such things may appear as the negative points on your credit report and may lead to a decrease in your scores. It is good if you set up reminders for the payment of your bills.
  3.  Repay the balances mentioned on your credit report as soon as possible. It is useful in boosting your CIBIL score.
  4.  Avoid cancelation of credit cards which are not in use. As canceling can lead to a fall in your credit score. If you have got a good long credit card history then this will help to improve your credit scores.
  5. Another tip is not to exceed your balance above 30% of your credit card limit.
  6. Applying excessively for loans may also cause your score to dip. So apply for loans but don’t shop around too much
  7. Have a good mix of secured and unsecured loans.Secured loans where the security is an appreciating asset such as home loans improves your CIBIL score while loans on depreciating assets like car loan, personal loan negatively impact your credit rating. Always try to maintain an 80-20 ratio between your secured and unsecured loans where 80% is the secured loan fraction.
  8. Exercise caution before becoming a guarantor.One of the biggest mistake many people make is becoming the guarantor for the other’s loan without giving it much thought. If the other person defaults in his loan repayment, your credit rating will also take a plunge as you’re the one who took his guarantee. Don’t do this unless you’re really sure.
  9. People with no credit hoistory can apply for a secured credit card. This may be done by opening a fixed deposit in a bank and taking credit card against that.
  10. If you do financial difficluties, never opt for settlements on your loans or cards! It adversely affects your CIBIL score as banks report such cases as “settled” at CIBIL. A good alternative to it is closing the account by paying the outstanding balance in full. While closing do not forget to get the NOC slip from the card issuing agency. Credit Card is closed only after receiving NOC from the bank. If you do not want to pay the amount or it seem totally outrageous to accept the closing amount, you can always contact the bank ombudsman.
  11. Consistency is the key. Consistency builds credibility and credibility inreases CIBIL score. A score above 750 shows you are credible enough and have paid all your dues on time. 800 and above puts you in the elite club. These days if you are above 700 mark, you have pretty good chances for the loan approval. There is no quick remedy for reaching the mark except a disciplined financial track-record and a balanced credit portfolio. Hope the above mentioned point will help you to understand and increase your CIBIL score.

A responsible borrower will always be rewarded with a great score! There is no specific timeline that can be measured for the score to go up, but it’s definitely not forever. The score gets updated mostly every month. With the seriousness of making the payments each month, and keeping a deep watch on finances, and the ratios, the score will start improving. Also, with that, the reaching to 750 scores also depends on where one stands. A score which is around 500 would take more time to reach the benchmark compared to the one at 650. the kind of defaults one has done would also affect in reaching that score. But never the less, the one who puts efforts in the right direction would always reach to the goal! So work diligently.

All the above steps can help to boost your credit score quickly. But remember, a good credit score is not made in a day. A boost takes anywhere from 3 to months depending on your current credit profile.