How to improve and increase your CIBIL Score?
March 04, 2019
The Credit Information Bureau (India) Limited or CIBIL is a credit information repository. Its aim is to help its members such as lenders and credit card providers take better lending and approval decisions. In other words, it helps its members give loans and credit cards to people with decent credit history.
CIBIL score is a three-digit number ranging between 300 and 900. When you apply for a loan or credit card, the provider will do a CIBIL score check before approving or rejecting your application.
Anything above 700 is considered a good score. But what if your credit score is less than 700? Are there any ways to improve your CIBIL score? Yes, there are a few effective ways that can help you improve your CIBIL score. 5 such methods are-
1. Be disciplined with repayments
Nothing damages your credit score more than delayed payments and outstanding debt. If you use credit cards or have taken a loan, ensure that you pay the credit card bills and loan EMIs on time.
Apart from lower credit score, late payments also attract penalty. Set reminders if you need to in order to never miss any due date.
2. Borrow only what you can repay
One of the best ways to improve CIBIL score is to borrow only what you can repay. Taking a loan is now easier than ever. But while loans are now easily available, you should never borrow more than you need. The higher the borrowed amount is, the higher will be the EMI and the higher will be the chances of missing payments.
Also, when taking a loan, make sure that you select the loan tenure and EMI very carefully to make sure that you can easily afford the monthly EMIs.
3. Use your credit card carefully
Credit cards are powerful financial tools, but a lot of people misuse them. While credit cards eliminate the need for you to make the payment when making a purchase, you’ll ultimately be required to pay for it. Thus, it is better to only use a credit card when you actually need to.
Also, try to pay credit card bills in full rather than only making the minimum payment. The balance amount attracts interest which can be considerably high.
4. Handle loan/credit card rejections smartly
If you are looking for ways to increase CIBIL score, you should also handle a loan or credit card rejections with care. While CIBIL only maintains your credit information, banks and credit card providers can see how many times your report has been accessed by other loan and credit card providers.
Multiple applications within a short span of time demonstrate a credit-hungry behavior and can affect your creditworthiness. So, when applying for a new loan or credit card make sure that you first check the eligibility requirements of the provider. Be patient if your application is rejected and avoid multiple applications within a short span of time.
5. Check your CIBIL report
While the chances are rare, but it is possible for your CIBIL report to have errors. For instance, your bank might have failed to inform CIBIL that you have recently repaid a loan or paid the credit card bills in full.
How to check CIBIL score?
You can visit the official CIBIL website to check your CIBIL score. If you do find any errors, you can fill a Dispute Resolution Form on CIBIL’s website to inform them about the same.
Improving CIBIL Score to be more credit worthy
Good CIBIL score not only makes you more creditworthy but also helps in making your loan and credit card applications get processed faster. Moreover, it is also possible to get a better deal from a bank if you have an impressive CIBIL score.
Now that you know how to improve CIBIL score, use these tips to improve your score and enjoy the various benefits associated with a higher score.
The contents of this document are meant merely for information purposes. The information contained herein is subject to update, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient’s own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. ‘lClCl’ and the ‘I-man’ logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.