May 27, 2024

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10 Essential Tips for Improving Your CIBIL Score Quickly

4 min read

The CIBIL score is a three-digit numeric summary of your credit report, history, and rating. It ranges from 300-900; the closer your rating is to 900, the better your credit score. The credit score plays a vital role in every loan application process because it is one of the first things lenders check to approve your loan application. The score helps lenders or banks determine your creditworthiness and estimate the risk of giving you the funds. 

A high credit score above 750 can help you get your desired loan at a low-interest rate and with favourable terms and conditions. So, review the section below to understand how to improve your credit score before applying for any loans. Also, do a CIBIL score free check to understand how much you need to work on before you can make any applications.

Top 10 Tips for Improving Your Credit Score

Take the tips below to make a significant difference in your credit score and get it high enough to receive great rates and offers!

Check your Credit Report

Check your credit report frequently to understand the crucial aspects of your CIBIL score. One of these aspects is the credit card or loan here; delayed payments or defaults exist, and your score has been lowered. Another thing you need to check for is the information recorded in your report since that assists in understanding any negative information that might be given there. 

Rectify the Errors

Make a CIBIL score free check and go over the report to check for any errors. If you identify an error or see a transaction you disagree with, you must file a request with CIBIL and rectify it within 30 days. 

Don’t Apply for Credits Continuously Upon Rejection

If your application for any credit card or loan you may have applied for is rejected, it is recorded in your report. Your score is reduced if you file for another credit right after facing rejection. That will only lead to the lenders rejecting your application again. The best thing you can do is improve your score and not fill up any more applications for some time. 

Check your Credit Utilisation Ratio

The credit utilisation ratio is the money you can spend from your credit card limit. Ensure that your CIBIL score keeps improving by spending a maximum of 30% or less. 

Pay Your Loans on Time

One simplest way to improve your CIBIL score is to pay off your loans on time. You can contact your bank to restructure your repayment cycle if you have difficulty paying off your EMIs. Be prompt with your EMIs to avoid any repercussions and maintain a healthy score. 

Don’t Settle Credit Cards and Loans

Settling your loans and credit cards with the bank means striking a deal where your debt is closed for a lesser amount than what is due. Some banks entertain such requests according to circumstances. However, any settlement is directly reflected on your credit report, reducing your score. This way, any other bank will be unwilling to offer fresh credit. So, ensure you don’t have to settle your loans and credit cards and pay your dues on time. 

Pay Off Your Credit Cards on Time

The best thing to do with credit cards is not to spend too much of the credit limit. And ensure that you pay back more than the minimum amount and at least keep a sizable chunk on your card. 

Minimise the Borrowing

Your score will come down if you are nearing your credit limit too often and if you are applying for many loans. So the best thing to do is not take a loan unless required and ensure you don’t come close to spending your credit limit. 

Watch Out for Joint Applicants

Your credit score will be reduced if you are a joint applicant for someone else’s loan and that person cannot pay off their debts. So, ensure that they make their payments on time if you are a joint applicant for anybody. 

Get Mixed Credit

There are two types of loans: unsecured and secured. Getting too many unsecured loans is a red flag for the banks, which can lead them to reject your application. So, you can take both secured and unsecured loans to have a balance between the two. 

Conclusion

While credit scores could be reduced due to some decisions, they can also be increased with time. All you need to do is follow the tips above and make a CIBIL score free check to see how your credit rating is affected. You can check your score and report for free online through the CIBIL website or even the CIBIL score app. Both mean working effectively and helping you boost your credit score and report. 

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