Improve CIBIL score is considered very important while taking a loan or credit card. Through this, the bank finds out your loan or lending capacity. CIBIL score is fixed between 300 to 900. A correct CIBIL score is considered to be 750 or above. If your CIBIL score is less than 750, then it can be improved in some ways.
If you have ever taken a loan or actively use a credit card, then you must have heard about CIBIL score. Through CIBIL score, the bank or financial institution assesses the loan capacity of the borrower.
It can also be said that through CIBIL score, the bank assesses whether the borrower will be able to repay the loan on time or not.
A correct CIBIL score is considered to be 750 or more. The higher the CIBIL score, the better it will be. Having a good CIBIL score helps you a lot in getting loans and credit cards. At the same time, you also get benefits while taking a loan. CIBIL can be improved using several methods. Let’s talk about them.
What is a Credit Score?
The credit score reflects a person’s financial creditworthiness, i.e. how eligible they are to get a loan. The credit score is presented as a number between 300 and 900. It is calculated based on a person’s credit, repayments, credit card usage and several other factors.
We want a good credit score to avail competitive interest rates and maximum loan amount. However, increasing your CIBIL score is not easy overnight. You first need to understand the reasons for your low credit score. Once you know what things are affecting your credit score, it becomes a little easier; as you know what specific points you need to work on.
How To Improve CIBIL Score?
- Make payments on time: Late payments can harm your credit profile and make it harder to get approved for credit in the future. Set up automatic payments or reminders to ensure you don’t miss a single payment. If you have taken any kind of loan. Or are a credit card user. So keep in mind that EMI should be paid on time. Along with this, pay the credit card on time.
- Avoid becoming a defaulter: If you have taken a loan with any family member, friend or any other person. Then you should avoid becoming a defaulter in joint loan. Because if the loan is not paid on time. Then you can suffer a big loss. At the same time, it can also affect the credit score.
- Avoid applying for too much credit: Applying for too much credit in a short period of time can negatively impact your credit profile. Apply for credit only when you need it and do your own research to find the best options for you.
- Avoid maxing out your credit cards: Maxing out your credit cards can negatively impact your credit score and make it harder to get approved for credit in the future.
- Balance of secured and unsecured loans: Car and home loans are included in secured loans. On the other hand, personal and credit have been added in unsecured loans. It is important for you to maintain a balance of both of these. This also affects the CIBIL score or credit score.
- Monitor your credit report: Check and monitor your credit report regularly to ensure all information is accurate. Checking your own score has no impact on it and, in fact, is considered a good credit practice.
Conclusion
Many a time a question may have come to your mind that why do you need a good credit score? The answer is simple, the better your credit score, the higher are your chances of getting a loan approved. Before you apply for a loan, you should opt for an online way to check your credit score. If you have any question regarding this post, then you can tell us by commenting in the comment box given below. Your feedback and suggestions are welcome as always. Thank you.
