How to Improve My CIBIL Score from 590 to 750?
Last Updated : April 15, 2021, 1:59 p.m.
If you are facing multiple loan and credit card rejections due to your low CIBIL score of 590 and want to improve your score to 750, don’t worry as there are many ways to improve it. When we talk about the CIBIL score, there are a lot of factors that go into both increasing or decreasing it. Almost every lender checks your credit score before giving you any kind of loan. A low score indicates that you are not very good at handling your debts and have irresponsible spending habits. But since you want to correct those habits now and want to build a score of 750, don’t worry as we will be telling you about some of the amazing ways to do the same.
Methods You Should Contemplate to Increase Your Score
You can have a look at some of the useful methods which could help you improve your CIBIL score to 750 from the low score of 590 at present. You need to keep all of them in mind so that you can do it gradually.
Timely Bill Payments
This is the first and foremost thing you should do to increase your credit score. One of the reasons that you have a CIBIL score of 590 is that you may have missed multiple payments. This generally happens as credit cards give you the option to buy now and pay later. Because of this, a lot of individuals spend beyond their repayment capability and fail to make the payment on the due date. In the next month, the bill goes higher due to late payment charges, taxes and other fees on it. There could be odd payment delays and defaults owing to inflated credit card bills. If you are the one facing such an issue, find the solution quickly else the score will go further down from 590. Use your savings or cut down your usual spending’s to clear your outstanding debts first. After that, you should purchase according to your repayment capability and make your bill payments on time whether they are credit card bills or utility bills. Yes, your utility bill payments also reflect in your credit report and affect your credit score.
Utilise Your Credit Card Carefully
If you are someone who believes in testing the limits, your credit card is not an ideal venture for this. When you decide to take out a higher portion of your credit limit as debt, lenders see you as a credit hungry borrower. They perceive this as taking debt more than what you can pay back and this affects your credit score greatly. So, it’s important to use your credit card wisely and use only 30% to 40% of your credit limit every month. By doing this, you will also be able to pay your bills on time and your credit score will reach 750 over time.
Say ‘No’ to Minimum Due Payment
A lot of people believe that they can get on with their financial behavior by paying only their minimum due amount on a credit card bill. We like to tell you that it impacts your credit score heavily. And with a score of 590, it might be possible that you must be doing this too. The minimum due is generally the 5% of the total bill amount. When you decide to pay only the due amount, the interest and other charges add up on the remaining amount and reflect in the next billing cycle.
By doing this continuously, you may fall into the trap of minimum due amount and soon, this amount will also be so high that you won’t be able to pay this. That’s why, always try to pay your total credit card bill amount, and for this, you will have to control your spending habits and put a stop on the unnecessary shoppings. Paying bills in full and on time is a sign of good credit behavior.
Avoid Debt Settlement
If you think that your credit score can be raised to a score of 750 by settling your old debt with your lender then we want to tell you that this won’t happen. By making a settlement on your debt, you may get away by paying a smaller amount but it will reflect on your credit report as Debt Settled. Because of this, you may face difficulty in accessing fresh credits. It will be better for you to avoid any kind of debt settlement with your lender so that you can start afresh. You can pay all your credit card debt by opting for a personal loan at a much lower interest rate. The lower rate will lead to lesser monthly obligations, helping you pay your debts on time. All that will help you raise your credit score to 750 over time.
Check Your CIBIL Report Regularly
Your CIBIL report holds all the financial transactions made by you such as credit card payments, EMI payments, utility bills and others. Sometimes, what happens is due to some dissimilarities in your name , date of birth, email id, and PAN, your credit score gets affected. So, it is important to check the report more than often so that you can report to the credit bureau and make them correct it. Incorrectness in your CIBIL report can also affect your CIBIL score, so when you will rectify them, your score will improve.
