How to Improve CIBIL Score Instantly?

"Learn effective ways how to improve your CIBIL Score instantly. It takes usually 3 to 12 months to improve your CIBIL score. Read our blog to know more."

msme-loan

5 mins read

Published: 6 February 2024

Updated: 6 February 2024

CIBIL Score is a unique method that is useful for analyzing the profile of a person who is ready to apply for a loan. This is a three-digit number that makes the decision easy for a financial company to provide a loan. Your CIBIL is calculated by some credit bureaus like TransUnion etc. When financial companies check your CIBIL, your financial records like your account, credit, and repayment behavior are reflected in the report. A good CIBIL Score is most important when you apply for a loan, otherwise, loan companies do not provide loans easily on low CIBIL.

Why CIBIL Score is Important?

When you decide to apply for a loan, your CIBIL score is essential. It makes you eligible to get a loan easily. A low credit score is always responsible for loan application rejection. Loan companies use CIBIL scores as reference points to analyze loan applicant profiles. It makes it easy for lending organizations to approve a loan or not. You will get Low interest rates on loans if your CIBIL Points are high but in situations of low CIBIL, you will get higher interest rates.

Reasons for Your Low CIBIL Score

Your CIBIL score was reduced for multiple reasons, below are some reasons:

  • Late payment behavior: Repaying EMI on time is very important for your CIBIL score otherwise your score will drop.
  • High credit utilization ratio: Don’t use too much of your credit limit. It shows that you need credit a lot. Keep your utilization below 30%.
  • Multiple loan or credit card applications: Applying for many loans or cards lowers your CIBIL score. It makes you look needy.
  • Settlement or write-off: Avoid settling or writing off your debts. It means you can’t pay them back. It hurts your credit report and score.
  • Errors or discrepancies: Check your credit report often. Fix any mistakes or wrong information. They can lower your CIBIL score.

CIBIL Score Range Table

CIBIL score indicator range is between 300-900. But a higher score is better. See what it means for your credit below.

CIBIL Score Range

Rating

Implication

300-549

Poor

Very low approval chance. Very high rates and fees. Need collateral or guarantor.

550-649

Fair

Low to moderate approval chance. High rates and fees. Lower limits and worse terms.

650-749

Good

High approval chance. Competitive rates and fees. Higher limits and better terms.

750-900

Excellent

Excellent approval chance. Best rates and fees. Highest limits and most favourable terms.

15 Tips to Improve Your CIBIL Score

Know the simple ways to improve your CIBIL Score with these 15 helpful tips. Whether you're new to credit or looking to boost your score, these easy-to-follow strategies can help you achieve better financial health. Get started today and take control of your credit journey.

1. Re-Payment on time :

Pay your EMIs and bills timely. Set reminders or auto-debit. This shows discipline and boosts score.

2. Reduce Credit card Use:

Spend less on credit cards. Pay off balances or increase limits. Use multiple cards and spread spending. This lowers the credit utilization ratio.

3. Multiple Loans:

Don’t apply for many loans or cards in a short time. This reduces hard inquiries and score drops. Apply only when needed and after comparing.

4. Mixed loan category:

Have a mix of secured and unsecured loans. Secured loans have collateral, like a home or car. Unsecured loans don’t, like personal or education. This shows credit handling ability.

5. Loan tenure:

Choose a longer tenor for loans. This makes EMI low and easy to pay. Paying EMI on time improves your score over time.

6. Inform Loan Company:

Talk to the lender or card issuer if in trouble. Don’t ignore or default on debts. This worsens score and history. Ask for restructuring or moratorium. This avoids settlement or write-off.

7. Check Reports:

Check credit reports regularly and fix errors. Get a free report from CIBIL or other bureaus. Use online platforms.

8. Good use of Credit Cards:

Use credit cards smartly. Use them for regular expenses and pay the full amount every month. This builds a good history and improves scores. Use card features and benefits to save money and boost your profile.

9. Close unused credit accounts:

This process lowers your credit risk and boosts your CIBIL score.

10. Be an authorised user:

You can use someone’s credit card as authorized. This improves your CIBIL score by using your credit history.

11. Monitor your joint or co-signed accounts:

Pay on time or it will hurt your and their CIBIL score. Talk to them if needed.

12. Don’t go over your credit limit:

This shows you are careful with credit and avoid fees or score damage. Track your limit and balance.

13. Don’t close accounts with due balances:

Pay them off first or your credit use ratio and CIBIL score will worsen. Don’t move balances around.

14. Earn more or spend less:

This helps you pay your debts faster and easier. Get a second job, save money, or invest wisely.

15. Get professional help:

If you can’t improve your CIBIL score yourself. They can guide you and fix your credit report. Choose carefully.

Conclusion

Your CIBIL score is very important for getting credit and good loan deals. So, you should always keep a high CIBIL score and improve it if it is low. By doing the things we said above you can make your CIBIL score better slowly and surely and get more chances of good credit and money health.

Also read: Apply for Instant Personal Loans in Bangalore

Frequently Asked Questions

Q 1. What is CIBIL Score?

Ans - The CIBIL score is a numeric digit that is helpful in the loan approval process for lending organizations. If your CIBIL is high it means you are a trustworthy borrower, but if your CIBIL profile is low then lenders are not interested in preferring you.

Q 2. What is a good CIBIL Score?

Ans - A good CIBIL score is a number between 700 and 900 that shows how well you pay back the loans and credit cards.

Q 3. How to increase CIBIL Score?

Ans - To boost your CIBIL Score you should pay your bills and loans at the correct time. You should use your credit cards within the limit. Never take multiple loans at once.

Q 4. How to check the CIBIL Score?

Ans - To check your CIBIL score you can visit the websites of the following CIBIL bureaus: TransUnion CIBIL, Equifax, Experian. Apart from this, you can use an Online Lending website like My Mudra who provide tools for CIBIL checks.

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