Your CIBIL Score is an important factor when it comes to a lender approving or rejecting your application for a loan. While you can get approval on loans such as a personal loan with a low CIBIL Score, it is in your best interest to apply once you improve it. A good score will help you get an instant personal loan at lower interest rates. So, here are 5 ways to give your CIBIL Score a boost.
5 steps to improve your credit score
- Clear all your existing debt
- Pay your EMIs on time
- Limit your credit utilisation
- Report discrepancies in your credit report, if any
- Borrow a mix of credit
Clear all your existing debt
Having outstanding debt is noted on your CIBIL report, and until you repay it, will negatively impact your CIBIL credit score too. So, it is essential that you clear outstanding debts to boost your score. To do this, repay your debt within your chosen timeline or make prepayments to foreclose your loan. Using credit responsibly will improve your score.
Additional Read: Personal loan for lowCIBIL score
Pay your EMIs on time
Making EMI payments isn’t enough. If you don’t make payments on time, it will pull down your CIBIL credit score. Delayed EMI payments are noted in your CIBIL report and include details of the number of days of delay. Here, the best thing to do is to set up an automatic transfer from your bank account to facilitate timely payment. Then, be sure that your account has enough funds to allow the transfer. This will ensure that you don’t incur a bounce charge and will improve your CIBIL Score too.
Limit your credit utilisation
Utilising too much credit shows lenders that you are unable to live in line with your income. So, while utilising credit, it is crucial to stay below the limit. It is also important that you use only as much credit as you can repay. In order to do this, make sure your credit usage doesn’t exceed half your income amount. You can also take measures such as paying your credit card balance in full and not using your credit card up to the full limit consistently.
Additional Read: CIBIL score calculation
Report discrepancies in your credit report, if any
Occasionally, there may be discrepancies in your credit report. For example, your CIBIL credit score may be low as your home loan lender hasn’t informed CIBIL of the latest payment details. So, a good practice is to check your credit score regularly and have any possible discrepancies corrected at the earliest. Bajaj Finserv, one of India’s leading NBFCs, also allows you to perform a free CIBIL check. Simply visit the Bajaj Finserv website and enter your basic details to check your credit score for free.
Borrow a mix of credit
If you do not borrow credit, you will not have a credit score. Also, if you borrow only one type of credit, it will not increase yourCIBIL Score. Thus, to improve your CIBIL Score, borrow a mix of credit. This involves taking secured and unsecured credit and repaying it diligently. Establishing credit experience will surely benefit your score.
In general, refrain from making ad-hoc financial decisions. Always try to take and use credit responsibly to maintain a good CIBIL credit score.Also, remember that once you implement these measures, it may take around 6 months to a year for your score to show improvement.
FAQs
Improve Payment History
By making on-time payments of credit card and loan EMIs, you improve your payment history and this helps to increase your credit score. Even a single missed payment on your credit card or loan can impact your credit score significantly, resulting in a fall in your credit rating.
Does anyone have 800 CIBIL score? ›
If you have a credit score of 800, it probably means you have a long credit history, have been making payments on time and keep a low credit utilization ratio. All this information shows lenders that you're likely to make good on your loan.
Is 700 a good CIBIL score? ›
A good CIBIL Score is a score between 700 to 900, which means the borrower has a higher chance of getting a higher loan amount at a low-interest rate. CIBIL has access to the credit information of around 600 million people and has 2,400 members that include lenders of all varieties.
Can I buy a house with a 771 credit score? ›
Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA loans can allow scores as low as 500, but will require a higher down payment.
How many days to improve CIBIL score? ›
The time taken to improve the CIBIL™ score can normally be around 4-12 months, depending on your consistency in reflecting good credit behaviour. A credit score close to 750 is considered good and it will take lesser time to further improve such a credit score.
Can we increase CIBIL score manually? ›
So if you are looking to improve CIBIL score pay your dues on time and rack up a good score. Use service that let you automate bill payment so that you don't have to worry about missing deadlines. Too much is, well, too much: Use credit prudently. Avoid taking on too much debt at one time.
What is the highest CIBIL score in India? ›
An individual's CIBIL score can range between 300 and 900, with the highest score being 900. Individuals having a CIBIL score of 750 or higher are generally regarded as responsible borrowers.
Is a 900 credit score possible? ›
Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
Can we buy credit score? ›
Before we proceed to suggest a course of action, it is important to understand and go through your credit report in detail. Buy your CIBIL Score and Credit report. This will cost you only Rs. 550/- and you can have access to the credit report within 3 business days.
How many people have an 800 credit score in India? ›
While 67% people who check their credit score on BankBazaar had a score of 700+, only 36% of them had a score of 800+ – a score that would enable you to get the best rate on any credit product from most financial institutions," said Adhil Shetty, CEO, BankBazaar.com.
In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days. Steps you can take to raise your credit score quickly include: Lower your credit utilization rate. Ask for late payment forgiveness.
Is 780 a good CIBIL score? ›
A CIBIL Score of 780 is well above the average credit score. An 780 Score is nearing perfection. You still may be able to improve it a bit, but while it may be possible to achieve a higher numeric score, lenders are unlikely to see much difference between your score and those that are closer to 780.
