6 Smart ways to improve your CIBIL Score | Increase your credit score quickly|

 

 How to improve your CIBIL Score?

CIBIL is of the credit rating agencies which banks and lending institutions use before financing to the customers to assess the credit risk involved with them. It reveals your credit history and tells the bank about your credit discipline and behavior. Nowadays lenders have also started offering interest rates as per your CIBIL Score. The higher the score, the lesser your rate of interest will be.

        CIBIL score lies between 300-900. A score above 700 can be considered as good for getting your loans sanctioned. Different banks have different cut-off scores for various types of loans. However, if you do not have any credit history, your score will be -1. In that case, you are not going to get any interest rate concessions based on the CIBIL score from your bank.   

         CIBIL score depends on various factors like the length of your credit history, credit discipline, credit utilization, Credit Mix, and No. of enquires made.

You create your credit history from the time you take your first loan or credit card. Even an overdraft against your fixed Deposit will create your credit history and will generate a CIBIL Score for you.

Now, let's discuss six smart ways to improve your CIBIL Score

• Pay your EMIs and dues on time

            Always keep a reminder for your due date of EMI or credit card payment. Paying your dues lately is seen negatively by the lenders and reflects an overdue in CIBIL report by the no. of days you pay late. This adversely affects your CIBIL Score.

In case of EMIs, if you have given standing instructions or NACH mandate to deduct the amount from your account and it does not have sufficient balance or the amount can not be debited due to any other reason, the Standing instruction or NACH mandate will fail and a penalty will be imposed to your account, but you can still pay your dues by fund transfer from any other account or cash deposit or any other payment mode. If you pay it the same day, no DPD (days past due) will reflect in your account. This will save you from getting your CIBIL score affected.

A standing instruction getting failed and an EMI getting bounced are two different things.

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• Keep a tab on your balances

Be prudent on how you use your credit card and limits. Too much credit reflects too much liability and it is a negative signal to CIBIL score. Always using your credit card and overdrafts to their full limits is not advisable. However, not utilizing its limit at all is also not a good practice.

 

 

• Keep a balance of different types of credit

It is good to have a mix of secured loans like home loans, auto loans, Overdraft against Fixed Deposits, etc, and unsecured loans like personal loans or credit cards. Here is a point to remember that too many unsecured loans can also affect your CIBIL Score. Hence, you should not be using too many credit cards also.

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• Take breaks on successive loans

 If you are applying for many loans one after the other continuously or even at the same time, it might reflect that you are seeking continuously excessive loans. This is an adverse signal to the CIBIL. Also apply for any loan or credit card only when you wish to avail it and not for just checking your eligibility or ROI (rate of interest) applicable because each loan application will fetch your CIBIL report and multiple inquiries by lending institutions can also bring your CIBIL score down.

 

 

• Watch your Guaranteed and Joint accounts monthly

Even if the status of your ownership may be a join holder or a guarantor, you are held equally liable for any overdue or unpaid payments by CIBIL. In that case, the loan account’s first holder’s inability or undisciplined behavior can impact your CIBIL score adversely and could cause trouble when it’s your time to get a loan.

 

 

• Review your CIBIL report at frequent intervals

Keep an eye on your CIBIL Score, you can directly fetch your CIBIL report from its official website. You need to pay some amount for it. When you enquire for your CIBIL report by yourself it does not get registered as an inquiry by a lending institution and hence does not deteriorate your CIBIL Score.

Download your CIBIL report and scrutinize it by yourself. If there is any discrepancy, regarding any of the information like your personal information, account status, repayment history, or sometimes, you may also notice, that an account or loan which you have not availed is reflecting in your CIBIL report. In these cases, you should immediately raise a dispute with CIBIL by visiting its official website.

CIBIL will have a check with the lending institution about the account against which a dispute is raised. Depending on the reply received from the lending institution CIBIL will update its report. CIBIL normally disposes of complaints and disputes within 30 to 45 days.

 This will prevent you from actually being troubled at the time when you will need your loan to get sanctioned as soon as possible. You can also contact the lending institution account of which has been wrongly reported in your report.

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             Wrapping-up the post, your credit score does not improve instantly. It takes time for your credit report to improve your CIBIL score subject to your constant efforts to maintain it. Reviewing Your credit history is always advisable. CIBIL’s official website also gives you the facility to have alerts whenever there are instant changes in your credit profile and score simulator. You can go and subscribe there for staying a step ahead.  

 Note: Be aware of the frauds by the firms or websites which claim that they can improve your CIBIL score. Remember that CIBIL is not associated with any agency for getting your score increased.