Your CIBIL Score is one of the most important measures of your financial health. So, it’s necessary to maintain a good credit score. This makes things easier for you during a CIBIL check. Poor repayment habits such as missing your payment deadlines and defaulting loan repayments can have an adverse effect on your credit report.
To improve your score you need to start drafting a plan on boosting your Credit Score. You should have a clear understanding of where you stand today. There are numerous benefits of having a high credit score such as low-interest rates on loans, easy access to future loans, etc. If you’d like to improve your credit score, there are numerous things you can do. The following are some tips to boost your CIBIL score.
Set reminders for your loan repayments
To maintain a good credit score you need to make sure you clear your outstanding debts and make timely repayments of your loan. You need to maintain discipline when it comes to paying your EMIs. Delay or default in loan repayments will have a negative impact on your credit report and may lower your CIBIL score.
Maintain your old credit cards
This will help you build a strong and lengthy credit history, which might help you increase and maintain a good CIBIL score in the future. Before offering you a loan the lender runs a check through your past payment history that determines your creditworthiness of obtaining a loan. You should continue to maintain your old credit cards as long as you are paying your bills in full and on time. A good CIBIL score makes it easier for you to avail any loan you plan on applying in the future.
Customize Your Credit Limit
When you are offered a certain credit limit on your credit card. It does not mean you should use the entire amount, you need to use the amount wisely. A higher credit limit utilization makes CIBIL perceive you as credit hungry and thus brings down your credit score. It’s best to keep the utilization ratio below 30% to 40% to get the score moving up all the time. In order to restrict yourself from using up more of the credit limit. You can get in touch with your lender and customize your credit limit based on your expenses.
Cut down on unnecessary expenses
There are numerous discount offers available on credit cards that can tempt you to eat outside more often than not, resulting in footing the bill unnecessarily. You can even purchase your other requirements using the credit cards. But when you receive the bill you will witness that both total dues and minimum due, with the latter getting calculated at around 5% of the former. The minimum due might first seem within your ability to pay back to the lender and so you do that. What happens then is that you fall into the never-ending debt trap as the credit keeps revolving around, decreasing your overall credit score. So, you need to be aware of your spending limits to stay out of the debt trap. Doing so will save you money and raise your CIBIL score gradually.
Check Your CIBIL Report for Errors
It is important to keep a check on your credit report, in certain cases, CIBIL may make mistakes when it comes to updating your records, note incorrect information against your report, or delay recording details. If you find any error or anything suspicious in the credit report you can straightaway file a CIBIL dispute. As such errors have the tendency to bring down your score. Checking your CIBIL report from time to time will help you be aware of the statements recorded in your report and save you from any fraudulent activities.
Avoid applying for multiple loansIt’s best to avoid multiple loans at the same time. This behavior will make you look credit hungry. This will have a negative impact on your credit score which will ultimately make the lenders doubtful of your creditworthiness. You can start to repay one loan and then take another to keep your credit score from crashing. If you take multiple loans at once, it will show that you have insufficient funds. As a result, your credit score will keep crashing. On the other hand, if you take a loan and repay it successfully, it will give your credit score a boost and you’ll appear as someone who is responsible for their loan repayments in the eyes of the lender.
