Let us know some such tips, with the help of which you can improve your CIBIL score.
How to improve your CIBIL/ Credit Score: Your CIBIL score is one of the most important things to consider for availing a loan. Be it a home loan, vehicle loan, personal loan or any other type of loan, banks always check the CIBIL score of an individual. It is also called credit score. This is a document, in which information about the credit behavior of the borrower is available. With the help of the credit score of the borrower, banks see whether they repay the loan on time or not. Through CIBIL Score, one can check whether the individual has defaulted on any loan payment or has not paid any EMI.
If your credit score is less than 750, the lender rejects your loan application. That’s why it is important to have a good credit score. Let us know some such tips, with the help of which you can improve your CIBIL score.
pay off your loan on time
Be it your credit card bill or loan EMI, it is important that you repay your loan on time. Defaulting on repayment of any outstanding amount affects your credit rating. You especially need to keep in mind that you pay the loan EMIs, as failing to do so attracts a penalty, and affects your credit score. Don’t miss your loan repayment date and make payments on time.
don’t take too much loan
A good way to improve your CIBIL score is to ensure that you do not take too many loans at a time. Make sure that you have paid off your first loan before taking a second loan. This does not reduce your credit score. If you take more loan at a time, it makes your lender think that you will not have enough funds to repay the same.
Carry secured and unsecured loans together
Most of the people have to take various types of loans to meet the different needs of life. But when you take a loan, make sure that it has a mix of secured and unsecured loans. Where home loan and car loan come under secured loan. Whereas, credit card debt or personal loans are unsecured loans. Therefore it is important to maintain balance.
Don’t Spend Your Entire Credit Limit
When it comes to improving the credit score, one way to do it is to not use your credit card till the limit given by the lenders. Spend only 30 per cent of the credit limit given on your card in a month. For example, if your credit limit is Rs 2 lakh per month, try to keep your monthly expenses up to Rs 60,000 only.
increase credit limit
Your bank may ask you to increase the credit limit on your credit card if you have good credit repayments. It will be better if you do not let this increased credit limit know. Increasing the credit limit does not mean that you increase the spending on your credit card. Keep the credit limit high, but limit the spending, which will improve your CIBIL score.
Don’t Leave Any Mistakes on Your Credit Report
There may be some mistakes in your credit report that can lower your credit score. For example, you have repaid your personal loan in full but it may happen that due to some error still remains unpaid. So it is important that you check your credit score and make sure it is error free.
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