How to Get a Good Credit Score?

Due to unforeseen circumstances and poor financial management, an individual may be unable to repay the loan on time, thus impacting his CIBIL Score. As a result, a borrower needs to re-establish his Credit Score. If you’re having the same issue, then you need to learn how to get a good Credit Score? Right away. As Credit Score is the first question a bank asks before approving an application for a loan or card. As a result, you should always foster a good CIBIL score before applying for any loan. We’ve gone through a few strategies that will help you boost your credit score so you can apply for more loans with ease and receive a rapid disbursement.

A CIBIL score is crucial when applying for loans from banks and NFBCs. By CIBIL scores, banks can determine whether an individual will be profitable over time. A low CIBIL might damage our credibility and make obtaining credit from the banks difficult. So, let’s look at some strategies to improve Cibil Score.

Free CIBIL Score Check

Parameters that improve CIBIL Score

A credit score is just a number that ranges from 300 to 900, depending on a variety of factors and parameters. The better your credit score, the more benefits you will receive. Banks and lenders aren’t looking for perfection. They only seek those with a good CIBIL score. Yes, even though lenders prefer a borrower who can pay back his loan on time. They still desire a good CIBIL Score. Furthermore, if your credit score is above 800, you will be able to obtain low-interest rates. Therefore, read on to learn about the seven crucial tips that will assist you in obtaining a decent credit score:

People Also Look For  What Makes a Good Credit History?

Monitor Credit Card Balances

You should be mindful of your credit card balance at all times because it can have a significant impact on your credit score. To maintain a decent credit score, attempt to utilize only 30%-40% of your credit card limit. The ratio between a credit card’s limit and its balance can significantly Improve Credit Score.

Don’t Apply for a Loan Unless It is Necessary

When you have an urgent need, you should always try to apply for a loan. Too many queries in a short period might harm your credit score. Only apply for a credit if you have an urgent need.

Apply for Both Types of Loans (Secured and Unsecured)

Having both types of loans can assist you in achieving a good credit score. However, you must not just have a variety of loans. Also, you must keep and balance them all equally, as lenders prefer to see this. You can improve your chances of getting a good credit score by doing so.

Consider Long – Term Loans

Pay special attention to obtaining long-term loans because the longer you have credit, the older your account becomes, which is better for your credit score. It is critical to have a credit score if your credit history is stable. It is advisable not to close old credit cards as well.

Keep Regular Track of CIBIL Report

Always keep track of your progress. Consistency is crucial when it comes to maintaining a decent credit score. You need to check your credit score regularly to always keep a track of where you are lacking. In this way, you can improve on the weaker areas, and increase your credit score.

People Also Look For  Minimum CIBIL Score Required for HSBC Credit Card

Practice Credit Repayment Discipline

Maintain credit discipline by setting payment reminders. Your ability to repay outstanding debt has a big impact on your credit score. This is why you must be disciplined when it comes to EMI payments. Late EMI payments result in a penalty cost and a reduction in your CIBIL  score. So. If you discover that you are guilty of this, please let us know. Make it a point to schedule EMI payment reminders so you can complete them on time.

Score Pattern for CIBIL

CIBIL Score RangingMeaning
NA/NH or -1 to 5This means it's either "not applicable" or "never happened before." If you have never used a credit card or taken out a loan, you will have no credit history.
350-549In this range, a CIBIL score is considered below average. It means you haven't made your credit card or loan EMI instalments on time. Getting a loan or a credit card with this CIBIL score will be difficult because you are at a high risk of defaulting.
550-649In this range, a CIBIL score is considered fair. It means you're having trouble paying your expenses on time. The interest rates on the loan could be higher.
650-750If your CIBIL score is in this range, you're on the correct track. Before giving you an offer, lenders will analyze your credit application. However, you may lack the negotiating strength to obtain the best loan interest rate.
750-900This is an excellent CIBIL score. It means you've made on-time credit payments and have a good payment history. Banks will also lend you money and give you credit cards if they believe you have a low chance of failing.
People Also Look For  Why Credit Reports are Important? Understand all the Reasons Behind it

A Good CIBIL Score Offers Many Advantages

Having a consistent good CIBIL score will assist you in saving money and simplifying your financial life. Here are a few of the many advantages of having a good credit score.

Loans and Credit Cards with Low-Interest Rates

If you have a good credit score, you’ll virtually always get the best interest rates and pay lower finance expenses on credit card balances and loans. You’ll be able to pay off your debt faster and have more money for other things if you pay less interest.

Loan and Credit Card Approvals are Easier

Having a good credit score boosts your chances of getting new credit. In all, you can confidently apply for a loan or a credit card.

Strengthening the Negotiating Position

Credit cards and loans will have a better interest rate if your score is good. If you need more negotiating leverage, you can use other appealing offers based on the credit score that you’ve gotten from other organizations.

Receive Approval for Higher Limits

To borrow money, you will need a salary and a CIBIL score. One of the advantages of having a good credit score is that banks are more ready to let you borrow more money because you’ve proven that you repay your debts on time. With a negative CIBIL score, you may still be approved for some loans, but the amount will be limited.

Personal Loan Interest Rates March 2024
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
SMFG India Credit12.00% - 24.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates March 2024
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.70%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%