How to Improve Your CIBIL Score Immediately?

October 28, 2022

CIBIL score paves a way for a secure financial future, so if it’s been a while since you’ve checked it, now may be a perfect time. Of course, first, you’ll want to know what your credit score is.A CIBIL score is a three-digit number that reflects your creditworthiness. It is used by lenders to decide whether to extend credit to you and at what interest rate. Your CIBIL score is based on your credit history, so it’s important to make sure your credit report is accurate.

A good credit score can help you get a better interest rate on loans, and even qualify for better insurance rates. But did you know that your credit score can also affect the prices of items you buy? Even if you’ve never touched a credit card in your life, your CIBIL Score might still be affecting the deals you’re offered.

How To Improve Your CIBIL Score Quickly?

If you’re looking to improve your credit score, you’re not alone.It’s important for you to know that CIBIL doesn’t just look at the negative aspects of a person’s finances when calculating their rating. They also take into consideration things like how often a person pays their bills on time and how they pay them — whether they’re making payments at different intervals or in full when they’re due.

 Timely Repayments

CIBIL Score is directly influenced by your repayment track history. You can protect your CIBIL score from drowning by repaying your outstanding debts and EMIs on time. Make sure payments are made on time by using instruments like auto-debit, standing instructions, and NEFT mandates.

In addition to credit card and loan payments, you must also pay your utility bills and other monthly expenses. The consequences of missing even one payment can negatively impact your credit score. Your credit score should eventually improve if you make your payments on time and keep your debt levels low.

 Maintain the Credit Utilization Ratio

An individual’s credit utilization ratio indicates how much credit they are using in comparison with the amount they have available. This shows how much of your credit is being used at any given time. You may be subject to a higher interest rate if you have a high credit utilization ratio, signaling a high-risk borrower to a lender.

 By paying down your debts and using less credit, you can keep your ratio in check. Alternatively, you can ask your lender to increase your credit limit. By doing so, you will have more credit to use, resulting in a lower credit utilization ratio. According to financial experts, the ideal ratio is 30% or less.

 Applying for Credit Cards

Your CIBIL score is one of the things you’ll need to consider when applying for a new credit card. Although credit cards act as an umbrella for our finances, excessive use of credit cards can detrimentally affect your credit score. By maintaining old credit cards, you’ll be able to build a robust credit history, which will increase your credit score.

 Say A No to Multiple Credit Lines

If you are hoping to increase your credit limit, a new line of credit may be the answer, but keep in mind that each credit inquiry will result in a hard inquiry on your credit report. Lenders will take a look at your CIBIL score when you apply for a loan or credit card. A hard inquiry can drastically lower your CIBIL score and this is what it looks like to a lender. This will negatively impact your creditworthiness, which will in turn, bring down your credit score. Taking multiple loans at the same time can lead to a decrease in your credit score.

Opt For Different Variants of Credit

It is recommended that you have a balanced portfolio of credit lines involving secured and unsecured loans with longer and shorter tenures to improve your CIBIL score. Maintain a healthy loan mix by paying off your unsecured loans first if you have more of them than secured ones.

Keep Your CIBIL Score in Check

Despite paying off your loan completely and closing it on your end, your credit score may still be lowered if an administrative error causes it to seem still owed. Maintaining a check on possible fraudulent activities and addressing inaccuracies will increase your score immediately. You can get a copy of your credit report online.

Increase Your Credit Limit

Increasing your credit limit can help you manage your credit to debt ratio. In this way, you can better manage your debt-to-credit ratio and maintain a good credit score at the same time.

Do not increase your credit limit unless you really need it, as this could affect your credit score and give the impression that you are overly reliant on credit cards. Keep your credit usage in check and apply for new credit in moderation.

How is My CIBIL Score Calculated?

CIBIL Score is a three digit numeric measure that is used to assess an individual’s credit history. TransUnion CIBIL generates an individual’s credit score by taking into account a number of factors, including your payment history, credit utilization, credit age, and more. Payment history is the most important factor in calculating your credit score, so it’s important to always pay your bills on time. Credit utilization, or the amount of credit you’re using compared to your total credit limit, is also a key factor. A good rule of thumb is to keep your credit utilization below 30%. Credit age is another important factor, so it’s important to keep your oldest credit accounts open and active.

Credit Utilization Ratio

A credit utilization ratio is the percentage of your credit limit that you’re using at any given time. For example, if your credit limit is $1,000 and you have a balance of $500, your credit utilization ratio is 50%.

Ideally, you want to keep your credit utilization ratio below 30%. That way, you’re using less than a third of your available credit, which looks good to lenders and can help you get the best interest rates.

If your credit utilization ratio is too high, it can hurt your credit score. That’s because it signals to lenders that you’re using too much of your available credit, which could mean you’re in financial trouble.If you’re trying to improve your credit score, one of the best things you can do is lower your credit utilization ratio. You can do this by paying down your balances, asking for a higher credit limit, or both.

Keep in mind that your credit utilization ratio is just one factor that impacts your credit score. So even if you lower your ratio, it could take some time to see an uptick in your score. But in the meantime, you’ll be doing your credit a favor.

 Repayment Track History

Improving your repayment history is one of the most effective ways to improve your CIBIL score.  This is a record of all the payments you’ve made on your loans, including your mortgage, auto loan, and credit cards. While calculating your CIBIL score, the number of late payments, the amount of the late payments, and how long ago the payments were made is also taken into consideration.A good repayment history indicates to lenders that you are a responsible borrower and are more likely to repay your debts on time. No matter what your credit situation is, it’s important to stay on top of your repayments.

Multiple Enquiries

If you are making too many loan inquiries, the lenders will check your credit report to check if you are eligible for the loan. A hard inquiry is when a lender checks your credit score in order to approve you for a loan or credit card. This can negatively affect your credit score, especially if you have a lot of hard enquiries in a short period of time. If you’re planning on applying for a loan or credit card, it’s best to do it within a few months so that the hard inquiries don’t drag down your score too much. When a lender checks your credit report, your credit score will decrease.

Credit History

Your credit history is one of the most important factors in determining your CIBIL score. However, If you have any negative items on your credit report, work on paying them off and bringing your balances down. In this case, you may need to seek out a cosigner or look for alternative financing options.  By doing so, you can improve your credit score and eventually qualify for better loan terms. With a little effort, you can make sure your credit history is a positive one – and that can make a big difference in your financial future.

What is A Good Credit Score?

A credit score is a numerical representation of your creditworthiness. It is used by lenders to determine whether or not you are an eligible candidate for a loan. The higher your score, the lower your interest rate will be. A good credit score is typically around 700 or higher.

A high score indicates that you have a good credit history and are a low-risk borrower. A score of 750 or above is considered excellent by most lenders and instills confidence in the lender that the applicant is capable of repaying the loan on time without default.

CIBIL Score Range Possibility of Approval
Below 600 Low to negligible
600 – 649 Difficult to avail
650 – 699 Possibility with stringent conditions
700 – 750 Easy to avail credit
750 – 900 The perfect score
Related Resource
Importance of a Good Credit Score
Low CIBIL Score & How to Better It! 
CIBIL Score for Personal Loan

Frequently Asked Questions

How can I improve my credit score?

You can improve your credit score by making timely repayments of your outstanding credit, maintaining the credit utilization ratio, avoiding multiple credits at one time, and keeping a check on your score from time to time.

How Long Does it Take to Rebuild Credit after Loan Settlement?

It can usually take upto a span of six months to rebuild your credit score depending on the score before the loan settlement.

Is 650 a good CIBIL™ score?

A CIBIL score of 650 cannot be considered as a good score. There is a possibility that lenders may offer your credit but with stringent terms and conditions applied.

Where can I check my credit score and credit report?

You can check your credit score and credit report on the official website of TransUnion CIBIL.

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