Ways to improve your CIBIL Score (Credit Score)
Our CIBIL score is very important as it affects our ability to get loans from banks. Our credit history, which includes our past credit payment patterns, determines our CIBIL score. To know how to improve CIBIL score, we need to be well equipped with our credit history and all the past payments made by us.
If our CIBIL score is low, then there are chances that we will not get loan from banks. In the following paragraphs, we will explore how to increase your CIBIL score to increase your chances of getting loans from banks when needed.
Our credit score is a three digit number which generally ranges from 300 to 900. It depends on our credit files and history and the past payments made by us.
Before we move on to how to increase CIBIL score, let us find out what is a good credit score that enables us to avail a loan.
|credit score||possibility of loan approval||creditworthiness|
|750 to 900||best and best||best and best|
|700 to 749||Very good||Very good|
|650 to 699||Good||Neutral|
|600 to 640||Difficult||suspicious|
|less than 600||very less||urgent action needed|
If our credit score is 750 to 900, then we can easily take loan from banks without any hassle. For a credit score of 700 to 749, chances are that you will be thoroughly screened before availing the loan.
Before improving your CIBIL score, make sure that you understand the principal amount that you intend to take as a loan.
What are the reasons for low CIBIL score?
There are many factors that can affect our credit score, which determines whether we will get approved for taking a loan or not. Knowing the factors affecting our CIBIL score is as important as increasing the CIBIL score rapidly.
Here is a list of all the possible reasons that lower our credit score.
If we have a habit of making late payments frequently, our credit score will always be on the lower side. Even a single late payment can greatly affect our CIBIL score.
Late payment not only shows that we are unable to plan our money properly but we may also face difficulty in availing loan.
The best way to get rid of such risks of late payment is by opting for a debt consolidation plan.
take multiple loans
Before we move on to find out how to improve CIBIL score, make sure that you are aware of availing multiple loans from multiple lenders. This can lead to late payments and eventually affect your CIBIL score.
This will show that we are not financially able to make our monthly payments on time. This can significantly affect our CIBIL score. When we take multiple loans and fail to make our payments on time, our lenders may send inquiry requests to the credit rating agencies. This greatly affects our credit score. It reduces our CIBIL score.
Exceeding the CIBIL limit
The credit limit that we have refers to the maximum amount that we can spend through our credit cards. The credit limit is determined based on our ability to pay. If we are thinking of how to increase our CIBIL score, we need to keep an eye on how much we spend beyond our credit limit.
If we consistently spend more than 50% of our credit limit, it will greatly affect our credit score. Make sure our expenditure remains within 50% to avoid low CIBIL score.
ways to improve cibil score
If we are worried about our CIBIL Score and wondering how to increase CIBIL Score, then following steps should be taken to improve our CIBIL Score:-
If we want to improve our CIBIL score faster then clear our dues properly. People who have a credit score of 750 to 900 ensure that they pay their credit bills on time. Do not make late payment, as it can badly affect our CIBIL score.
If we keep on spending more than 50% of our credit limit every month, it will show us as a person who is not able to manage his money well. Limit your expenses and ensure that we spend around 30% of our credit limit per month on maintaining a good CIBIL score.
To know how to increase CIBIL score, we must keep an eye on our credit report. Many customers have mistakes in their credit reports at times. Make sure we keep checking our credit history to avoid such inconveniences.
Do not apply for credit cards continuously. Though credit cards are very helpful when we apply for a loan, having too many credit cards can make us look like an unproductive person. Maintain a distinction before applying for a credit card. Make sure we apply for a credit card when we know that we can repay our monthly amount on time.
Increase your credit limit to reduce your credit utilization report instantly. This will improve our CIBIL report.
Make sure we keep our old good loan account on our credit report so that it helps us in getting a good credit score. If we have a good repayment history for a long time, then activate your good accounts.
Don’t miss or delay your payments, as this will indicate a risk to the credit scoring model. Suddenly paying less than the full amount or not making a credit card payment can ultimately lower our credit score.
Make sure you implement these methods if you are wondering how to increase CIBIL score fast. Do not take your credit score lightly, as it will affect your loan approvals by banks. Keep an eye on your credit history and take necessary steps to ensure that your CIBIL score is reasonably reasonable before applying for the loan.
How long does it take for a good credit score?
Once your credit score drops, it will take a long time to improve your credit score.
It can be really difficult at times, but it is not impossible. Keeping a constant eye on your credit history can help you rebuild your credit score sooner than you think.
A credit score of up to 750 is considered a good CIBIL score to apply for a loan.
If you have CIBIL scores less than 700 or 650, make sure you focus on improving your score.
It may take between four months to 12 months for you to become eligible to apply for the loan. The tenure depends on your current CIBIL score and your credit history. If your CIBIL score is less than 650, it may take you more than eight months to recover from that stage.
What is the credit score required for personal loan?
A credit score of around 700 to 900 is considered a good score when you apply for a loan. Chances are, when you have a good credit score, you will always be called for a loan.
Suppose your CIBIL score is less than 750, your chances of loan approval get reduced. However, when your credit score is below 650 or less than 600, work on improving your score before applying for the loan.
If you are wondering how to improve CIBIL score, first analyze and understand why your credit score is bad. Work on improving your score to around 750 so that you can be eligible to take the loan as and when the need arises.
Frequently Asked Questions (FAQs) on How to Improve CIBIL Score
Question: How can I improve my CIBIL score?
Answer: The major steps you need to take to have a good credit score include paying your credit bills on time, avoiding multiple loans and limiting the usage of your credit score. Also, it involves keeping an eye on your credit history to avoid all kinds of mistakes and inconveniences.
Question: Is 800 a good CIBIL score?
Answer: 800 CIBIL score is generally considered to be a good credit score. Once your credit score exceeds 750, you are eligible to apply for loans from banks. 800 is a good credit score that keeps your chances of approval at a high level.
Question: Why is my CIBIL score not increasing?
Answer: The main reason for your credit score getting stuck is that you are making late payments. Your lender may send inquiry requests to credit card agencies which highly affect your CIBIL score. To increase your credit score, first make sure you make your monthly payments on time.
Another possible reason is that you are probably using more than 50% of your credit limit each month. This greatly affects your credit score. Make sure you keep your expenses within 30% of your CIBIL limit so that the assured score grows exponentially.
Question: How is the CIBIL score calculated?
Answer: Your credit score is calculated using your past payment history. It is calculated between 300 to 900 depending on your credit history. If your credit score is 750 to 900, credit institutions rely more on you to be a responsible customer who manages his money well.
Question: How can I get 900 CIBIL score?
Answer: Make your payment regularly on monthly basis and avoid late payment. Do not spend more than 30% of your credit score monthly so that you can easily get a CIBIL score of 900. Make your payments regularly on a monthly basis and avoid late payments. Do not spend more than 30% of your credit score monthly so that you can easily get a CIBIL score of 900.
The longer your credit history, the better your credit score. To have a good credit history make sure you are paying your EMIs on time.
Question: How can I solve my CIBIL problem?
Answer: To solve your CIBIL problem and improve your score, understand why your score is low and what you can do to improve it. Don’t forget to keep an eye on your credit history to analyze your credit score and take the necessary steps to keep it around 800 for safekeeping.
In this post, a solution has been given to increase CIBIL score fast. How long does it take for a good credit score? How to improve CIBIL score is explained in detail.