Produced by: Navneet Dubey
Designed by: Manoj Kumar
Improving your Credit Information Bureau India Limited (CIBIL) credit score can seem daunting, but taking a proactive approach can result in significant improvements. Look at some valuable tips from Money Today that can help improve your credit score.
It is a 3-digit numeric summary of one’s credit history. It ranges between 300 and 900. A score above 650 and near 900 is considered better.
Paying off outstanding debts on time, such as credit card bills or any overdue loan amounts, is crucial. Making timely repayments reduces your debt and improves your Credit Utilisation Ratio (CUR).
Credit Utilisation Ratio or CUR is an essential factor in credit scoring. The amount of credit you have taken is divided by the total revolving credit available. Keeping it under 30% helps improve your credit score.
Limit credit usage. Excessive use of credit cards can imply potential financial distress. Do not take too many personal loans, car loans or other loans.
When you increase your credit limit and your outstanding balance remains the same, your CUR instantly lowers, which can help improve your credit.
Having a blend of secured and unsecured loans on your credit report is important. A heavy concentration of unsecured loans, such as credit card loans, could pull down your CIBIL score.
Regularly review and analyse your credit report to certify all the data recorded is accurate. In case of inaccuracies, report them to the concerned lenders and get them rectified without delay.
If your loan application has been rejected, avoid immediately applying for another one, as multiple rejections could further decrease your CIBIL score.
Improving a CIBIL credit score takes time and patience. Adopting and maintaining these best practices consistently can significantly increase your creditworthiness.