Improving the CIBIL score is essential to create a good impression on the lender and sanction the loan in less time. Since the CIBIL score reflects whether you pay bills on time, how much you spend every month, and if you have a good mix of secured and unsecured loans, it helps the lender to understand your creditworthiness. Hence, it is vital to maintain a good score. You can check your free CIBIL score from a reliable website and start working on your credit behaviour to improve the score.
If you want to know how to improve CIBIL score immediately, there are no hacks or tricks that can increase your score in minutes. However, by following certain strategies, it is possible to improve the score in the shortest time possible.
What Is Considered a Good CIBIL Score?
CIBIL score is measured on a scale between 300-900. Any score below 600 is considered poor, and any score about 600 is considered good. Therefore, credit users should get between 600-900 to get loan approvals faster from a financial institution. A good CIBIL score can make you eligible for better interest rates.
Table of Contents
How to Improve CIBIL Score?
The following are the six ways to improve your CIBIL score within four to twelve months. Follow all the steps to improve your score from day one.
- Use Only 30% of the Credit Card Limit.
Calculate your credit limit and ensure you spend only 30% of the limit on your monthly expenses. Anything about 30% can reflect a high utilisation ratio and affect your score.
- Timely Payments
If you have taken a car, home, personal or any other loan, ensure to repay the loans on time. If done otherwise, it can affect the score. You can look at your free CIBIL score from a trusted website and clear the loans on time. Some banks do not charge a prepayment penalty, so you can repay the loan before the time to stay on the safe side. Set the alarm to keep reminders of repaying the loan on time.
- Maintain a Good Credit Mix
Another effective way how to improve CIBIL score is by maintaining a good credit mix. Ensure the perfect combination of unsecured (like credit cards, personal loans) and secured loans (like auto loans, home loans) of both a short and long tenure to keep the score balanced. Too many secured loans, if taken at the same time, can affect the CIBIL score. Check the free CIBIL score to ensure the mix is balanced.
- Limit Credit Card Application
The banks can affect your credit score if you apply for many credit cards and ask for high-value purchases. Ensure to send applications after a good interval to avoid such a situation.
- Check Free CIBIL Score Regularly
Sometimes, due to errors, incorrect scores might show on the report. Therefore, check the score daily to ensure that the monitoring is done correctly. If not, you can get it rectified to improve the score or restore your original score.
- Don’t Remove the Debts from the Report
This is an important tip on how to improve CIBIL score. The lender decides to approve the loan application depending on your loan history. If you remove the debts from the report, they won’t be able to check the record and, therefore, might end up rejecting your loan application.
In a Nutshell
Check the free CIBIL score from time to time to understand what is affecting your overall score. If you check regularly, you will know the reason that impacts the score from the list specified above. Accordingly, you can take measures to increase the score.
