Top Strategies On How To Increase Your CIBIL Score

December 26, 2023
how to increase cibil score

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Are you struggling to secure loans or credit cards with favorable terms? Your CIBIL score could be the culprit. CIBIL, or Credit Information Bureau (India) Limited, is a credit score that lenders use to evaluate your creditworthiness. A high CIBIL score can help you access credit with ease, while a low score can make it difficult to obtain credit or result in unfavorable terms. If you’re wondering how to increase CIBIL score, we’ve got you covered with effective strategies to boost your creditworthiness and improve your financial standing.

In this ultimate blueprint, we’ll delve into some top strategies that can help you boost your CIBIL score. We’ll start by exploring what is considered a good credit score and the CIBIL score range. Then, we’ll dive into actionable tips on how to increase your CIBIL score, including ways to reach an impressive score of 800. But what if you don’t have a credit card? No problem. We’ve also included tips on how to increase your CIBIL score without a credit card.

Don’t let a low CIBIL score hold you back from your financial goals. Read on to discover the ultimate blueprint on how to increase your CIBIL score.

What Is Considered a Good Credit Score?

If you want to get approved for loans and credit cards at favourable terms, then a good credit score is an essential component. The CIBIL score is a widely used credit score in India. And, if you have a score of 750 or above, it is generally considered a good score. You can also check your CIBIL score online.

Here is a breakdown of the CIBIL score range and what each range means:

  • 750 or above: Excellent
  • 700-749: Good
  • 600-699: Average
  • Below 600: Poor

However, each lender has its own credit score criteria. What’s considered a good score with one lender may be insufficient for another. As a result, you must maintain a good credit score overall. It will help you to enhance your chances of securing loans and credit cards with favorable terms.

Also Read: Understanding Credit Ratings for Businesses in India

CIBIL Score Range

The CIBIL score is a three-digit number. It reflects your creditworthiness. The CIBIL score typically ranges from 300 to 900. If the score is higher, it indicates a better credit profile. Let’s get into more detail about the CIBIL score range:-

  • 750 or Above: If your CIBIL score is 750 or above, it is considered an excellent credit score. Borrowers with good scores are more likely to get favorable deals in loans and interest rates.
  • 700-749: If you have a credit score between 700-749, it is still considered good. You can get decent loan terms and interest rates.
  • 600-699: The credit score between 600-699 is considered average. You may face some challenges in getting loans at the desired terms.
  • Below 600: The credit score below 600 is considered poor. If you have such a score, you may find it difficult to get loans or credit cards.

You can also check your CIBIL score free online by pan number.

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How To Increase CIBIL Score?

Improving your credit score will take time but it’s all worth it. With a good score, you can get loans and credit cards with favorable terms. By implementing the below strategies consistently, you can improve your CIBIL score over time. So, let’s move ahead:

Set Reminders to Repay on Time

To maintain a good CIBIL score, making timely payments is important. You can do this by setting reminders. Some of the key points to keep in mind are as follows:

  • Timely payments help an individual to build and maintain a good credit score.
  • You can stay on track with the payment by setting reminders.
  • Your credit score may suffer if you make payments late or miss them altogether.
  • To set reminders, use mobile apps, email, or SMS alerts.
  • Moreover, automatic payments can ensure timely payment.
  • Keep track of payment due dates and make sure your account has enough funds.

You may increase your CIBIL score and build your creditworthiness by setting reminders and ensuring timely payments. Remember to make timely payments every month so that late or missed payments don’t negatively affect your credit score.

Check for Errors in your Credit Report

Your credit score should be based on accurate information only. Therefore, checking for errors in your credit report and correcting them is important. This will improve your creditworthiness.

Plus, it’ll become easy for you to avail of credit in the future. Some of the points to remember are:-

  • Obtain a credit report copy from CIBIL or other credit bureaus.
  • Check your credit report thoroughly for any mistakes or discrepancies.
  • Check for errors in the account information, personal information, and payment history.
  • If there are any errors, contact the credit bureau immediately.
  • Ensure that the corrections are made by following up with the credit bureau.
  • Regularly review your credit report to ensure that all information is accurate.

Try Maintaining a Healthy Credit Mix

Another important factor in building and maintaining a good CIBIL score is maintaining a healthy credit mix. Credit mix refers to the different types of credit. This includes credit cards, loans, and other types of credit. You can show that you can responsibly manage different types of credit by maintaining a healthy credit mix. Here are some key points to keep in mind:

  • Having a mix of credit types can help improve your credit score.
  • Having too much of one type of credit can negatively impact your score.
  • Avoid applying for too much credit at once, as this can also lower your score.

Clean all Credit Cards

Credit cards are seen as a very useful financial tool. But it is important to manage it properly. If you clean up your credit cards and use them responsibly not, it can have a negative impact on your score. By cleaning up your credit cards and using them responsibly, you can improve your credit score over time. Some points to remember are:

  • You need to review all of your credit cards. It’ll give you a better understanding of which ones you really need.
  • It’ll be good if you close any credit card accounts that are no longer in use.
  • Pay off your credit card balances in full each month.

Remember to use credit cards responsibly and make timely payments to maintain a good score.

Say No to Being a Joint Account Holder

Avoid holding joint accounts until absolutely required if you want to keep your CIBIL score high. Agree for a joint account only if you completely trust the primary account holder. Monitor the account regularly to ensure that the payments are made on time

  • Both account holders are equally responsible for repaying the debt.
  • Make sure that the payments and not late or missed on a joint account. There should be proper communication between both account holders.
  • Having trust is crucial here. If the primary account holder defaults on the debt, it can also impact your score.
  • Being a joint account holder can limit your ability to avail of credit in the future

Get a Secured Card

Getting a secured card can be a good option if you are still trying to get approved for a traditional credit card. It can help build or rebuild your credit score. Here are some key points to keep in mind

  • A secured card is backed by a deposit that you make upfront, which acts as collateral.
  • Even if you have a low credit score or no credit history, it is easy to obtain a secured card.
  • Make sure to choose a secure card with low fees and a low interest rate.
  • Use your secured card responsibly by making small purchases. And paying them off in full each month.

Avoid Taking Multiple Loans at a Time

Taking multiple loans at a time will not be good for your credit score and financial stability. Avoid taking multiple loans unless it’s necessary. Some points to remember are:

  • Applying for a loan leads to a hard inquiry on your credit report. This can lower your score.
  • If you take multiple loans at a time, it’ll become difficult for you to miss out on payments sometimes. It may harm your score.
  • Defaulting on any loan can make it harder to avail of credit in the future.
  • Take loans only if you can afford to repay. Plus, keeping track of due dates and timely payments is a must to maintain a good credit score.

By avoiding multiple loans, you can reduce the risk of default and improve your credit score over time

Limit your Credit Utilization Ratio

Limiting your credit utilization ratio is an important factor in maintaining a good CIBIL score. You can improve your credit score by keeping your credit utilization ratio low. Additionally, the chances of getting approved for credit in the future can also be increased.

  • Your credit utilization ratio is the amount of credit you have used compared to the total amount of credit available to you.
  • A high credit utilization ratio can negatively impact your score and make you appear riskier to lenders.
  • Your credit usage percentage should be kept below 30%.
  • Paying off your credit card balances in full and on time every month can help keep your credit utilization ratio low.

Choose a Longer Tenure

Choosing a longer tenure and making timely payments can help maintain a good credit score. By this, you can maintain a good credit score and avoid defaulting on your loans. It’s also important to assess the financial situation before choosing a tenure. This will help you to manage your loans effectively.

  • A longer loan tenure means smaller EMIs. This can make it easier for you to make timely payments.
  • By choosing a longer tenure, you can reduce the burden of the loan. Plus, managing finances will become easier.
  • However, a longer tenure can also mean paying more interest over the life of the loan.
  • It’s important to weigh the pros and cons and choose the best tenure for your financial situation

Increase your Credit Limit

Increasing your credit limit can help you improve your CIBIL score, but it’s important to use this strategy carefully. Here are some key points to keep in mind:

  • A higher credit limit can reduce your credit utilization ratio, which is an important factor in determining your credit score.
  • With the increase in credit limit, comes an increase in debt potential. It can be risky if you’re not able to manage your credit effectively.
  • Before requesting a higher credit limit, ensure that you have a good track record of making timely payments.
  • Also, be aware that requesting a higher credit limit may result in a hard inquiry on your credit report, which can temporarily lower your score

Mastering CIBIL Score Improvement Strategies

In conclusion, maintaining a good CIBIL score is essential for availing of loans and credit facilities. A high CIBIL score indicates a borrower’s creditworthiness, making it easier to get loans with favorable interest rates and repayment terms. In contrast, a low score can lead

To increase your CIBIL score, it is essential to make timely payments, avoid high credit utilization, and maintain a healthy credit mix. It is also recommended to check your credit report regularly for errors and take steps to rectify them. Additionally, avoiding multiple loans simultaneously, being a joint account holder, and choosing a longer tenure can also improve your score.

While it may take some time to see significant improvements in your CIBIL score, consistent efforts toward maintaining a good credit score can yield long-term benefits in terms of loan eligibility and better interest rates. Therefore, taking steps toward improving and maintaining your CIBIL score is crucial.

Frequently Asked Questions (FAQs)

What are the reasons for low CIBIL Scores?

Some common reasons for a low CIBIL score include the following:
1. Delay in payments
2. Defaulting on loans
3. Having a short credit history
4. Too many credit inquiries
5. Being a guarantor for a loan that has defaulted
6. Having a high credit utilization ratio

How to Maintain a Good CIBIL Score?

To maintain a good CIBIL score, you should consider the following:
1. Make timely repayments
2. Keep your credit utilization ratio low, preferably below 30%
3. Check the credit report periodically. Rectify errors in the report, if any.
4. Avoid being a guarantor for loans that you cannot repay in case of default.
5. Keep track of your credit score and take essential actions to improve it.

How Long Does it Take to Improve Credit Score?

The time it takes to improve a credit score depends on various factors. This includes the severity of the negative information, the individual’s credit history, and their credit utilization ratio. However, with consistent effort, it is possible to improve a credit score within a few months to a year

Do late payments and high utilization of credit limits have a negative effect on your score?

Yes, late payments and high credit utilization ratios can have a negative impact on your credit score. It’s important to make timely payments. Plus, keep your credit utilization ratio low to maintain a good credit score

How can I raise my CIBIL score in 30 days?

It’s challenging to raise the CIBIL score in 30 days. But, you can follow some strategies which include:
1. Making timely payments
2. Maintaining a low credit utilization ratio
3. Checking for errors in the credit report

Is the CIBIL score updated daily?

No, CIBIL scores are not updated daily. They are updated periodically based on the reporting cycle of the credit institutions

How to improve your CIBIL score without a credit card?

You can increase your CIBIL score without a credit card by:
1. Taking a secured loan
2. Maintaining a healthy credit mix
3. Paying your bills on time

How to increase the CIBIL score to 800?

To increase your CIBIL score from 750 to 800, you can focus on maintaining a low credit utilization ratio, making timely payments, and avoiding multiple loans at once. You can also consider taking a secured loan or increasing your credit limit. But it’s important to use these strategies carefully.

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