9 Ways To Build And Improve Your Credit Score Fast

What is a CIBIL score all about?

Your CIBIL score is a numerical representation of your creditworthiness. It’s a three-digit number between 300 and 900. A credit score of 900 or above may entitle you to more favourable credit card and loan offers. Most lenders, including banks and non-banking lending organisations, want a CIBIL score of 750 or above (NBFCs).

The Credit Information Bureau India Limited (CIBIL), which controls your credit score, has direct influence on your future interactions with lenders and financial institutions. A high credit score ensures that your loan or credit card application is approved quickly, but a low credit score jeopardises your current and future chances.

Having a good credit score pays financially. A good credit rating might help you get better and faster loans. A poor CIBIL score, on the other hand, may be concerning for individuals in severe need of money, as it may have a negative impact on their borrowings.

Loans can be obtained in a variety of ways, all of which are based on the size of the loan or the amount asked by the borrower. However, all banks are now required to verify all applicants’ CIBIL scores for all credit products, such as personal loans and credit cards. Even though an individual’s CIBIL score is low at times, there are ways to improve it.

How can I quickly raise my CIBIL score?

However, it is not all terrible news. These seven wise steps will help you improve your credit score. However, you should apply these strategies on a regular basis and keep track of your Personal Loan EMIs and Credit Card monthly payments. Here are some easy ways to raise your CIBIL score:

1. Don’t spend all of your credit.

To maintain a good credit score, keep your credit use percentage around 30%. You should only utilise credit up to 30% of your total credit limit, according to the ratio. Making a budget and separating your needs from your wants is a sure-fire way to avoid overpaying.

2. Make EMI payments on time

If you have any current EMI payments or monthly or annual instalments for a running purchase such as a vehicle, smartphone, home, or other significant expenditures, always pay on time. On-time repayments are one of the most essential factors influencing your CIBIL score. They contribute to your creditworthiness.

3. Decide on a longer repayment time

To improve your CIBIL score, always choose a longer loan repayment term. If you have a longer repayment period, your EMI payments will be cheaper and easier to afford. Because of this, your CIBIL score will rise.

4. Maintain a record of old debt accounts

If you pay off a debt or loan, don’t close it out of fear of harming your CIBIL score. Paid-off debts reflect your ability to repay to CIBIL and financial lenders. They will also show you how long it will take to repay your obligations.

5. Do not take out several loans.

One of the most important pieces of advice is never to take on more than you can handle. Taking out additional loans, unless you have enough means to repay them, may make monthly payments difficult. They can also trap you in a debt cycle, leaving you with little to no money for day-to-day living expenses.

6. Create a credit history.

You will have no credit history if you are asking for a loan for the first time. As a result, CIBIL will be unable to assess your repayment capabilities. Obtain short or long-term loans and a good credit mix to build a strong credit score.

7. Clear your credit card debt as soon as feasible.

Before applying for new credit, make sure you pay off any outstanding bills. Any past-due obligations are a sign that you have a lot on your plate. If your bank or lender detects that most of your income is going toward your present debt. 

8. Check your CIBIL score report for any errors

Even CIBIL may occasionally make errors in its CIBIL score reporting. Errors can occur when updating records. If you discover an error, notify CIBIL immediately by filing an online dispute or phoning them. Within 30 days, CIBIL is responsible for resolving the situation or, at the very least, presenting a solution.

9. Avoid using a joint credit card account

While there are advantages to having a shared credit card, there are also disadvantages. The defaults of a partner will have an impact on you and impact your CIBIL score, lowering your chances of obtaining a loan.

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