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How to Improve your CIBIL Score?

how to improve CIBIL score

Nobody likes to be put under the shadow of doubt. Especially when it is about financial credit, we want to be seen as responsible and diligent. CIBIL score plays a vital role when an individual is out seeking credit from banks and NFBCs. It is through this credit score that banks judge whether an individual is creditworthy or not. A poor CIBIL score can adversely affect our creditworthiness and make it difficult for us to seek credit from conventional sources. But, there are some very simple and effective ways on how to improve CIBIL score that you can follow.

You wouldn’t be alone if you keep thinking about how to improve CIBIL score immediately or how long does it take to improve CIBIL score. Though no magic can be worked upon those numbers for an overnight result, you can always follow habits that are healthy for keeping a good credit profile.

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How to Improve CIBIL Score?

You can follow these 6 ways to increase CIBIL score and improve your credit worthiness.

  1. Punctuality never goes out of style – Try to be as punctual and consistent with your EMI and credit card payments as possible. This proves your sturdy finances and exhibits your responsible behaviour. Whether for a coffee or EMI payments, turning in late only fetches raised eyebrows!
  2. Mix and Match for the better – Keeping a balance between secured and unsecured loans would help you enhance your image as a borrower. An individual generally opting for unsecured loans might attract attention.
  3. Keep it low – It is highly advisable to keep your debt quotient low. Though your loan repayments would shrink your loan amount with time, it would be helpful to pay attention to your credit card as well. Try not to max out your credit card limit more often as this might not paint a good picture about your credibility. Limits are set to be adhered, especially if they are financial!
  4. Stalking is good – Keep an eye out for your jointly held bank accounts as you are equally responsible for any miss-outs or late payments there as well. Negligence of your joint account holder might put you in bad light decreasing your credit score. Hence, constantly monitor your co-signed, joined and guaranteed accounts to avoid the pickle.
  5. Keep yourself calm while new credit application – Try not to go overboard when applying for fresh credit. Loans of limited amount prove that you know your repayment capacity and would be able to pay-off in time. Whereas, high debt amounts might seem as if you have bitten more than you can chew.
  6. Keep coming back for more – A practice of reviewing your credit history every now and then would bear benefits in the longer run. Make it a point that your current financial status reflects minutely in your CIR. Coming back to your credit history every trimester would be good enough to keep your CIBIL score healthy!
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Getting an understanding of the CIBIL scoring pattern

It is quite essential to know about the CIBIL report and the pattern of scoring to judge where you might be going wrong. A CIBIL report is the credit record of an individual which is maintained by CIBIL- nation’s first credit information bureau. It includes details of loans and credit cards that an individual is bearing along with the history and consistency of repayment. This gives banks a fair idea about your financial behaviour and responsibility and if they can confide in you.

The scoring pattern of CIBIL functions between the range of 300 to 900. The higher score makes it easier to get credit facilities. Usually, banks prefer a credit score of 750 and above. This score is considered to be a mark of excellent credibility and financial sturdiness. So, follow the above mentioned tips on how to improve CIBIL score.

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Personal Loan Interest Rates January 2020
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank10.75% - 21.45%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank11.50% - 18.00%
Tata Capital10.99% - 18.00%

Home Loan Interest Rates January 2020
State Bank of India/SBI7.90% - 8.55%
HDFC8.00% - 8.95%
LIC Housing8.10% - 8.95%
PNB Housing Finance9.25% - 12.00%
Piramal Capital & Housing Finance9.00% - 9.10%
Tata Capital9.20% - 9.35%
ICICI Bank8.25% - 9.35%
Bank of Baroda8.40% - 9.40%
Axis Bank8.90% - 9.15%
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%