Your CIBIL score, often known as your credit score, is a crucial aspect in determining whether or not you will be approved for a loan. CIBIL scores are calculated using your credit history, which includes past credit purchases and payment trends. A high creditworthiness score implies good creditworthiness, whereas a low creditworthiness score suggests low creditworthiness. Low credit scores make you a riskier borrower, and lenders will be wary of approving your loan application.

TransUnion CIBIL, one of India’s credit bureaus, assigns a credit score to people and businesses that varies from 300 to 900. The closer your credit score is near 900, the more likely you are to get approved for a loan. A score of 300 to 549 is considered bad, while a score of 550 to 700 is considered fair.

How to Raise Your CIBIL Score?

Now that we understand why credit scores are important, let’s look at how you may improve your CIBIL score. Only when your credit score is in jeopardy and you plan to apply for a new loan or credit card will you need to improve your credit score. If we suppose your score is low, here are some things you can do to enhance it.

• Look over your credit report

Regularly reviewing your credit reports is a good idea since it will reveal two things that are extremely important to your crif highmark. The first is a loan or credit card where you have defaults or late payments that have lowered your credit score. The information that is documented in the credit report is the second thing it will tell you. This aids in the repair of the credit score because if you discover bad information on the report, such as defaults or payment delays, you can always contact the bank and CIBIL to address the problem.

• Errors should be corrected

You should promptly challenge any errors by going to the official website. You can identify the transaction with which you disagree or the error after reviewing your CIBIL report. You must respond to disputes within 30 days and correct them.

• Make a mental note of your credit utilisation ratio

Make sure you’re not using your credit card for everything. Maintain a credit usage ratio of 30 percent or lower. You will see a good influence on your CIBIL score if you do this.

• Pay off your debts

If there are any loans that you have been delaying payments on, you should make it a priority to start paying them on time. If you’re having trouble paying your existing EMI, you can ask your bank to assist you restructure the loan so that it’s easier to pay.

• Make timely payments on your credit cards

When it comes to credit cards, the best course of action is to avoid exceeding the credit card limit. You should also make sure that you are not only paying the minimum amount due on your credit cards; you should be paying back the entire balance or at least a significant portion of it.

Keep your CIBIL Score in Check Like a Pro

Doing everything properly but still having trouble maintaining your CIBIL score? Wondering what else you can do? Not only does negative credit behaviour in terms of payments and credit limits harm your CIBIL score, but there are various other aspects as well. Your credit choices and linked areas can also have an impact on your score. The following are some of the reasons:

• Utilization of Credit

Always keep the Credit Utilization Ratio in mind when using credit. This ratio compares how much credit you’ve used to how much credit you still have available. This proportion accounts for 30% of your total score.

• Loan Requests

If you want to buy a new automobile or obtain a loan to purchase your dream home, you should consult with a few banks before making your decision. Multiple inquiries can establish a red flag against your name, lowering your credit score significantly. Every inquiry you make with a financial institution is recorded and impacts your credit score, making it more difficult for the bank to decide whether or not to extend your credit. Each inquiry lowers your CIBIL score.

• Repayments

Confused? How might a lower CIBIL score be caused by repayments? If you suddenly pay off all of your credit card bills with a large sum of money, it will have an impact on your credit score. It can make your financial records appear shaky, resulting in a lower credit score. Repayment on time and in a timely and effective manner, on the other hand, will have a favourable impact on your CIBIL score.

Is it possible to raise my CIBIL score?

Your whole borrowing history is represented by your CIBIL score. It’s a representation of a pattern, so if you’ve defaulted on a loan in the past, even paying off a few credit card payments on time won’t significantly improve your score. You’ll need to get into the habit of paying your bills on time, taking out more secured loans than unsecured loans, and never missing a credit card payment. As you repay your bills, your credit score will progressively increase.