How to Improve My Credit Score if My CIBIL is Below 700?

Highlights

  • Tips to Improve Your Credit Score
  • Effective Measures to Take If Your Cibil is Below 700

Naman Verma, a 32-year-old, Mumbai based businessman is a proud owner of a beautiful penthouse located in a posh location of Juhu, Mumbai. On recalling the incident, he said that he bought this house 4 years ago and it wasn’t a smooth journey for him. Reason being, his bad credit score. When he approached the bank for the first time to avail a home loan, he was shocked to know that his score was poor due to which his loan application got rejected. He was depressed and disheartened but he was determined to buy his favourite property. Thus, one day he simply wrote on the internet-how to improve my credit score if my cibil is below 700.

The moment he wrote this query on the internet, he got numerous informative and useful articles that gave him the tips to improve his cibil. He spent next few hours in reading more stuff and finally got the solution to bring his cibil in a good position.

Well, just like Naman, in today’s time also, many people are worried about their poor credit/cibil score , hence are facing the loan rejections. This is the reason that the queries of cibil or credit score are always there on the search engines. So, if you are someone whose cibil score has gone below 700, need not to worry as we are here to help. All you need to do is just read this post to know some useful and simple tips that can improve your credit score.

But before sharing the tips and tricks, let’s just try to understand the actual cause of a low credit/cibil score.

Factors that Bring Your Score Down

  • Excessive Credit Limit Utilization
  • Delay in  Loan/Credit Card Payment
  • Making Too Many Credit/Loan Enquiries
  • Revolving Credit on Credit Cards

Well, as your score is below 700, chances are higher that you have been defaulting since 4 or 6 months either on your credit card payment or loan EMIs. Need not to worry as usually a score of 700/750 out of 900 is considered to be fair enough in grabbing the best deal. So, which means, with your disciplined behaviour and patience by your side, you would be able to improve your score. Curious to know how? Read the blog below.

Simple & Effective Tips to Improve Credit/Cibil Score

Make Payments on Time

Any delay in loan or credit card payments would not only attract a surcharge, late payment fee, interest charges and other sorts of fees but also bring down your score. It is always advisable not to skip or do a late payment as doing so will have an adverse effect on your score. If you may find remembering the last dates of your bill/loan payments, set a reminder on your phone as this thing will help. Late or missed payments create a negative impact on the credit history of an individual and make your profile look risky in front of lenders. So, try to be punctual with your payments.

Manage Your Credit Cards Well

Many people like to flaunt their credit cards, don’t you agree? If their wallet has 10 compartments, they would like to fill it with 10 different cards. But they don’t realize the fact that it simply shows that a person is a credit hungry and the same will reflect on his/her credit score. Not only this, the more cards you have, the higher chances of credit card debt. It is difficult to maintain a balance, if you have too many cards. Reduce the number of cards from your wallet. Stick to 2 or 3 cards which you can manage well and stay away from credit card debt so that your cibil will remain in a good position.

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Pay Your Dues in Full

Your every bill will show you the minimum amount due. Don’t get excited after looking at the minimum amount which is lesser than what you actually owe to the bank. Always try to pay the entire amount as the more revolving credit you have, the worse it is for your cibil. Also, on your remaining/outstanding balance, the bank will further charge an interest in the next billing cycle. So, make a habit of paying your dues in full swing as it not only improves your score but saves you from paying more to the bank.

Do Not Use Your Entire Credit

Be careful while using your credit card/s as overspending is one of the prime reasons for your cibil’s downfall. Work on the credit utilization ratio and try to keep your spendings below 60% of your actual credit limit. Utilizing more than 60% of card’s limit can actually put you in a panic situation as chances of debt are higher. So, keep yourself within the barrier of 60% in order to improve your score.

Avoid Too Many Credit/Loan Enquiries

Too many loan/credit card enquiries and that too within a short period of time adversely affect your score, brings it down. So, it would be a wise move to avoid checking the score too often or enquire for cards/loans too frequently.Just for your knowledge, even two or three enquiries in a month could be a prime reason for your low score or rejection.

Say No to Unnecessary Expenses

It is often seen that many people easily get attracted towards the credit card offers. And, in order to make the most of an offer or discount, they actually end up spending on unnecessary items. Well, doing so will put them in a never-ending debt trap, which is actually bad for your score. In order to stay away from such a situation, all you can do is prepare a monthly list of items you need to spend on. Follow this monthly list as doing so will also help you with a lot of savings. Check your bank statements monthly and highlight the prone areas especially the extra expenditures so that you can not only improve your score but can also save a lot of bucks.

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Don’t Go for Debt Settlement

There is no denying the fact that debt settlement surely seems to be an easiest and quickest options to get away from the debt trap, isn’t’ it? Well, if you think it is, my friend you are absolutely wrong. Whenever people fall into a debt trap, the quickest solution they could think is of a debt settlement without realizing the fact that the same will actually work negatively in their favour. Yes, going for a debt settlement creates a bad impression as it represents an individual’s inability to repay the debt, which in result will not only harm his score but reduces his chances to avail a fresh loan/credit card in the future.
However, those who have already exercised the debt settlement will most likely face the rejection of a loan/credit card. But you would be glad to know that even such applicants can avail a loan/credit card by giving the collateral/security in the form of Fixed Deposit. That’s Right! A secured loan or a secured credit card could be an option for them as many lenders offer loan or credit card against FD to such applicants. But before going for this option, don’t forget to pay on time so as to maintain or raise your score.

Personal Loan Interest Rates November 2018
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates November 2018
State Bank of India/SBI8.70% - 9.25%
HDFC8.80% - 9.70%
Bank of Baroda8.65% - 9.65%
LIC Housing8.70% - 9.05%
PNB Housing Finance9.00% - 13.00%
ICICI Bank9.00% - 9.25%
Axis Bank8.80% - 9.05%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%