Homeinstallment creditHow to Improve your CIBIL Score Immediately?

How to Improve your CIBIL Score Immediately?

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If you have never been a fan of numbers, then here is another three-digit numerical value that could throw a curveball your way. CIBIL score is a reflection of credit history and can make or break your ties with your bank in terms of obtaining loans. As creatures driven by a need for consumption, we’re almost always on the brink of purchasing a loan-driven item, and in order to furnish such wants, you should probably pay attention to your credit history. If you are on the lookout for easy hacks to ensure that your CIBIL score portrays a more positive image of your financial prudence, then here are some chief ways to do so:

Steer clear of joint bank accounts – 

Suppose you have a partner or friend who would be willing to take on joint financial responsibility. In that case, you’d best hold on to them, but starting a joint bank account when you have a deteriorating CIBIL score probably won’t do you any favors. You see, entering into such an obligation would be a bit of a gamble since you might have to end up bearing the brunt of any financial follies committed by the other bank account holder. This could negatively affect your credit score and, in turn, make it harder for you to get a bank loan approved. Even if you do wish to start a joint bank account, then make sure to do so with someone who is a beacon of financial prudence and understands the implications of entering into such an agreement. 

Pay your credit card dues – 

Most of us have a procrastinating strain in us. More so when the activity eats away at a huge chunk of your bank balance. That being said, you can’t run away from your credit card dues forever because they will catch up with you soon enough. While the number on the bill might not be such a happy one, paying your dues on time will contribute heaps towards the improvement of your CIBIL score. If you have a busy schedule and find it hard to play catch up, then you could employ the following ways to stay on top of it – 

  1. Set reminders: Technological inventions have made it super easy for us to keep track of our spending, so if you wish to pay your credit card bills on time, you could instill reminders on various apps in order to ensure you have no outstanding dues. 
  2. Automate transactions: Automating your expenses is a great way to rid yourself of any worries regarding your credit card bills. So, hit up that tech-savvy friend of yours, automate your payments, and enjoy a stress-free journey towards a great CIBIL score!
  3. Pay as and when they arise: If you wish to be extra cautious and go the extra mile, then paying your credit card dues as and when they arise could not only help you pay on time but also help you be mindful of your spending and monitor your expenses. 

Choose different credit paradigms – 

If you wish to maintain a better CIBIL score, then opting for a diverse mix of credit schemes can be a move in the right direction. Generally, banks tend to prefer people with a range of unsecured and secured loans. Unsecured loans refer to personal loans and credit cards, whereas secured ones are vehicle loans, home loans, etc. Enable the pre-payment option in your unsecured loans to maintain a lucrative mix of credit schemes that appeal to loan providers. 

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Opt for a longer duration – 

Going for a longer credit tenure gives you the flexibility to manage your payments and reduces the risk of defaulting on them. With more time to pay, the EMI amount you will be obligated to provide goes down, giving you ample time to fix your finances and procure the amount. This lower probability of default automatically puts you on the fast track to a better CIBIL score, thereby allowing you to enjoy the benefits of an easier loan procurement process. 

Assess your credit reports – 

Every bank invariably provides you with a credit report that contains detailed information about your transactions. These reports are a powerhouse of data since they can point out to you exactly what is draining your CIBIL score. Here are some of the main assessments you can draw out of your report and the measures you can take to fix them:

Cause Remedy 
Error in the report Speak to your bank manager and rectify the deviation.
Irregular repayments  Set in reminders and automate as many expenses as possible
Unidentified transactions  Secure your bank account immediately, and put a hold on all transactions
The high credit utilization ratio Reduce your credit expenditure, and opt for debit transactions instead 
Excessive unsecured loans Decrease your debts by repaying as many as possible 

Take on debt prudently – 

Taking on multiple loans simultaneously may signal impending doom for your credit score since the assurance of meeting such large sums may be quite low. As a result, financing all of your requirements with debt during the same period may not be such a good idea. Picking unsecured loan options to meet expenses on the lower end of the spectrum may help in easing this process. Try and repay as many existing debt schemes as well. 

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Apply for credit only when in dire need – 

Increasing the amount of credit you apply for without any repayment options in sight may not be so good for your CIBIL score; as a result of which, you should ensure to opt for it on a priority basis. While increasing your credit limit can be financially prudent if you find a way to keep your utilization level to a low, doing so requires some hardcore understanding of your finances, so for the most part, avoid opting for credit whenever you need a minor concession. Rather, focus on monitoring your credit utilization ratio, and ensure that it does stay within the 30% mark as much as possible.

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How to Improve your CIBIL Score Immediately FAQs:

1. What does the CIBIL score mean?

A CIBIL score is essentially a numerical representation of the creditworthiness of the account holder. It ranges between 300 to 900 and is used by banks to assess whether or not they can sanction a loan to the holder. It also generates a report containing concise details regarding the credit card holder’s transactions, defaults, etc.

2. What CIBIL score is considered good?

The range of a CIBIL score extends from 300 to 900, so generally, anything above 700 is considered good. While a score lower than 700 may qualify you to obtain a loan, procuring a loan at a low-interest rate may be quite difficult.

3. Can CIBIL score be negative?

If your CIBIL score is in a negative figure, there is no available information regarding your credit history, and you need to apply for a credit card to start a running credit score.

4. Where can I check my CIBIL score?

If you wish to check your CIBIL score, you can head over to the CIBIL website, where you can find your personalized score under the ‘know your score’ tab. You will generate a score within a few minutes, depending on your entered information. Important details required to obtain the same include loan details, identity proof, income, etc. You can even head over to the website of your bank in order to obtain your CIBIL score.

5. When is a CIBIL score generated?

A CIBIL score is generated once the receiver has entered all the required details, such as bank information, credit history, debt history, ID proof, and so on. The authorized credit agency does this on their website.

6. How is the CIBIL score affected?

Various factors related to your payment history and track record affect your overall CIBIL score. This includes the repayment of EMIs on time, payment of credit card bills, debt taken, and much more. Credit exposure and payment history form core factors, with various associated things affecting it as well.

7. Why is CIBIL score important?

Your CIBIL score is important as it represents to your lender the extent of faith they can invest in your creditworthiness. While the score is subject to interpretation depending on the lender, it generally serves as a first impression source. Lenders often adhere to the specified norms laid down in the lending industry.

8. Are CIBIL scores and credit scores the same?

No, your CIBIL score and credit score are not the same, although they serve overlapping functions. A CIBIL score is generated by the official bureaus authorized by the SBI. On the other hand, your bank can provide your credit score to prove your creditworthiness after taking into account various factors.

9. Who can check my CIBIL score?

Any potential lender you approach for banks will be able to check your CIBIL score and access your overall creditworthiness through the credit reports released for the same.

10. Which CIBIL score is bad?

If your CIBIL score lies between the range of 300 to 549, it is deemed bad and is a sign for you to take steps towards improving it. While a score above 700 is desirable, the range between 550 to 700 is still considered decent.

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