Ways to Improve your CIBIL Score

A Cibil score is a three-digit number that ranges from 300-900 based generated after analyzing your credit history. The minimum CIBIL score is 300 and the maximum CIBIL score is 900. Any score that is closer to 900 usually 750, or above is considered as a good CIBIL score.

Having a low CIBIL score increases the chances that your credit card or loan gets rejected. To avoid being in such a situation, the most common question that arises in the mind of people are that how can I improve my credit score?

Here are some ways to improve your CIBIL score:

Automate your bill payments: Missing out on repayments of your utility or credit card bills can be a big mistake, as it affects badly your credit score. You need to be sincere and punctual in paying EMIs. If the EMIs got delayed, you do not only have to pay only heavy penalties bur also your credit score will go down.

Keep a track of all errors in your credit report: In your head, you might think, my credit score or credit history is good, but it is wrong. There can be various unknown errors in your report that are pulling your credit score down. For instance, if you have paid all your loans and credit card bills in full and on time, but in your report, it is reflecting as current due because of administrative error. You need to resolve these errors and you will see an immediate rise in your score.

Keep a healthy credit mix: It is good to have a healthy credit mix of unsecured loans and secured loans. If you are having a higher number of secured loans, both lenders and credit bureaus consider you creditworthy and give a good credit rating. If you have a higher number of unsecured loans as compared to the secured ones, try prepaying your unsecured loans to maintain a healthy mix.

Avoid taking multiple loans in a short span:  Applying for multiple credits in a short span shows your credit hungry behavior. It is better to take one loan at a time and pay it successfully to give a boost to your credit score.

Keep your credit utilization ratio max 30 percent: One of the easiest ways to improve your credit score is to not utilize your credit card to its extreme limit. Ensure to spend only 30% of your credit limit per month.

Choose a longer tenure: When taking a loan, go for a longer tenure to repay the money. This way, the EMI will be less, and you will easily be able to make all the payments on time. You will keep yourself away from the defaulter's list and will improve your score.

Check your credit report frequently:

Frequently check your CIBIL score and CIBIl report. Online almost with each of the lenders, you can get a free CIBIL score by sharing personal details like name, address, phone number, and PAN details. According to the Fair Credit Reporting Act, you are liable for a free CIBIL report once a year, where you can get a free CIBIL score.

Conclusion

The journey of a minimum CIBIL score to a good CIBIL score usually takes 4-13 months based on an individual’s situation. All you need to be is patient, smart, and disciplined while spending money or taking a loan.