How to Improve Your CIBIL Score : Advanced Techniques & Tips

Thanks to modern platforms, it’s easier today to manage your money, whether it’s your salary, credit card, or hefty home loan. To be financially healthy, you need to learn a bit about your credit score. CIBIL has a lot of ground to cover, but today, we will tell you how to maintain a good balance without being hassled about it.

10 Ways to Increase Your CIBIL Score

Pay On Time

Paying on time is one of the simplest ways to keep your credit score in good shape. It shows lenders that you’re reliable and manage your debts responsibly. A very handy way to do so is to set reminders or opt for automatic payments to avoid missing payments. Regularly checking your credit report to ensure all your payments are accurately recorded is also a good idea. Staying on top of your payment schedule can greatly affect your financial health.

Manage Your Credit Utilization

A strong credit score is key to how much credit you use compared to your limits. Aim to use less than 30% of your available credit across all accounts. This shows lenders you’re not overly reliant on credit and can manage your finances wisely. If you’re nearing your limit, consider spreading your spending across multiple cards or asking for a credit limit increase, but only if you can afford the extra credit. Regularly monitoring and adjusting your spending habits can boost your credit score quickly.

Switch to Automatic Payments

Setting up automatic payments for your bills and credit card ensures you never miss a due date. Missed or late payments can negatively impact your credit score. Most banks and credit institutions offer this feature, which can also be found on platforms like Paytm, Google Pay, and more. This makes it easy and gives you a better view of your monthly finances.

Just ensure you have sufficient funds in your account before the due date.

Keeping Your Finances in Check

It is all about making smart financial moves. It starts with setting up a simple budget to track your ways. This isn’t just about cutting back (though that can help); it’s about making sure you’re spending wisely on what matters most to you. Paying yourself first by savings. Even a small amount can make a big difference over time.

Avoid making impulse purchases over credit cards; think twice before swiping. Try the 21-day rule; if you want to purchase something, hold that thought for 21 days. You would buy it even after a month if you really wanted it. If not, then you just dodged a bullet of impulse purchase.

Keep an Eye on Your Credit Report

Don’t go by the words; it is more than a score. Credit reports offer an understanding of your financial health. Regular reviews can help you catch errors and fraudulent activities. If you spot them early, you can safeguard your credit score and money. Think of it as a financial health check-up that ensures everything is on track and allows you to make informed financial decisions. Regular checkups also help you be educated about scores, and be wise about the money!

Learn the Art of Credit Mix

Managing your credit wisely is a disciplined art. It’s important to have a mix of credit, like a car loan, a credit card, and maybe a mortgage. This shows lenders that you can handle it responsibly. This approach can lead to a better credit score. However, it comes with a high risk. You always need a stable income to balance; if you cannot pay any, it causes more harm than good.

Limit Your Credit Enquiries

When you apply for multiple credit cards simultaneously, each entity checks your credit limit. Every time someone does it, it creates a hard record of credit check. This whole process is known as a hard inquiry. With each check, you’re being judged financially, which creates a dent in your score. It might make people wonder why you’re asking so many at once. That’s why it’s wise to be thoughtful about when you’re applying for new credit. Limiting your applications to only those you’re confident about helps protect your credit score.

Old is Gold, Keep Everything Active

Holding onto your old credit accounts, keep your financial journey alive. These accounts contribute significantly to your credit score by showcasing your depth of credit history. Closing these accounts abruptly will result in a loss of valuable trust points. It’s better to maintain these old lines of credit, even if you’re not using them or have a bad history.

So, think twice before cutting ties with your old credit accounts; they’re silent yet powerful allies in your credit score journey.

Don’t Forget Your Joint Accounts/Co-Applicant Loans

Keep an eye on any loans or financial assets you have attached to someone. If you share an account with someone, like a bank account, mortgage or credit card, whatever happens with that account affects both of you. So, if the person you share the account with misses a payment or spends too much, it’s not just their problem—it could hurt your credit score, too.

To avoid trouble, check on these accounts often. If you see something off, like a failed payment or a higher-than-expected balance, talk it out and devise a plan. It’s all about teamwork. And hey, if things change—maybe you and the person you share the account with aren’t as close anymore—it might be a good idea to rethink whether you still want that joint account. Keeping on top of these shared accounts can save you from a headache (and a dip in your credit score).

Last But Not The Least, Build a Financial Cushion

It’s your safety net for those “just in case” moments. When life throws you a curveball, having some money stashed away means you won’t have to slap it all on your credit card and risk maxing it out. If you’re not stressing about finding cash for surprises, you’re less likely to miss a payment or rely too heavily on credit. Starting small is fine; what matters is that you start. Over time, save enough to cover a few months of expenses. This cushion keeps your credit score healthy and gives you peace of mind.

Range of Credit Score

Now that you know how to make a healthy score, let’s see what  healthy score looks like!

Score Range	Credit Quality	Impact
750 – 900	Excellent	Eligible for best interest rates and loan terms
700 – 749	Good	Favorable loan terms
650 – 699	Fair	May face higher interest rates
550 – 649	Poor	Higher interest rates, limited credit options
Below 550	Very Poor	May not qualify for most credit

Conclusion

In wrapping up our guide to boosting your CIBIL score, we’ve made it clear that you don’t have to be a bookworm to have a good score.

Some patience, smart financial habits, and the right guidance will do the trick. Following Urban Money lets you learn more about such smart stuff with just a click. Urban Money supports you in this journey, offering insights and tools tailored to your financial growth. Let’s move forward together, turning your credit goals into reality with practical steps and continuous learning.

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