Improve CIBIL Score: If your CIBIL score is good then you can get a loan at a good interest rate with better terms without any problem. At the same time, if the CIBIL score is bad, there are many problems in getting a loan and sometimes the bank can refuse it directly. Let us know how CIBIL score is checked and how to improve a bad CIBIL score.
Many times we suddenly need money. Like there is a medical emergency at home, or a house has to be built or land has to be purchased. In such a situation, we usually arrange money by taking a loan. But, if you want an easy loan, then for this you have to maintain a good CIBIL score.
Let us know what CIBIL score is and if it has deteriorated, how can it be improved.
What is CIBIL score?
Credit Information Bureau India Limited (CIBIL) is a credit information company. It has got a license from the Reserve Bank of India (RBI) and it tracks loan related activities of common people along with companies. Its rating is called CIBIL score.
CIBIL Score or CIBIL Rating is a measure that shows how good your record is in taking and repaying a loan. It ranges between 300 to 900. 300 to 600 means you are very bad at repaying the loan. At the same time, a CIBIL score of 750 to 900 indicates that your loan repayment record is excellent.
What if CIBIL score gets spoiled?
If your CIBIL score is less than 750, you may face problems in getting a loan. You may not even get a credit card. But, the good thing is that CIBIL score can also be improved. Let us know five ways to improve CIBIL score.
1. Repay loans on time
If you do not repay the loan on time, it has a negative impact on your CIBIL score. You should always pay EMI on time, because delay in it not only attracts penalty but also reduces the credit score.
2. Maintain a good credit balance
You should have a good mix of secured loans like home loan and car loan with unsecured loans like personal loan and credit cards. Banks and NBFCs generally prefer those with secured loans.
If you have more unsecured loans, they should be paid off first to maintain a good credit balance. If you have used a credit card, try to pay it before the due date. This can be a good plan to improve your credit score.
3. Do not keep dues on credit cards
If you have used a credit card, try to pay it before the due date. This can be a good plan to improve your credit score.
4. Avoid becoming a guarantor of the loan
You should avoid opening a joint account or becoming a guarantor of someone’s loan. If the other party defaults, your CIBIL score may also get affected. Also, you should not take multiple loans simultaneously. If you want to take a second loan, try to finish the first one. This will also help in increasing credit score.
5. Use credit card within limit
If you don’t use up your credit card limit, you can improve your credit score quickly. Try to spend only 30 percent of the credit limit every month. Spending more than this shows that you spend money without thinking and your dependence on debt is high.
Also, while taking loan, you should choose a long period for repayment. This will keep the EMI less and you will get longer time to repay the loan. Your chances of defaulting will also be less and your CIBIL score will automatically improve.
How long will it take to improve credit score?
The answer largely depends on your financial situation. If you repay your loan on time and spend on credit card expenses, your credit score can improve in 4 to 13 months. But, the basic mantra remains the same that you have to be disciplined when it comes to spending money.
Check CIBIL Score like this…
– Visit https://www.cibil.com/.
– Click on ‘Get your CIBIL Score’.
– Type your name, e-mail ID and password. Submit an ID proof. Then enter PIN code, date of birth and phone number.
– Then click on ‘accept and continue’.
– OTP will be received on your registered phone number. Type that and select ‘Continue’.
– After this select go to dashboard and check your credit score.
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