Cibil Score: Many times, due to some of our mistakes, the Cibil score gets marred. If you also want to know this, then first of all you will have to correct some of your mistakes. After correcting the mistakes, your Cibil score will gain momentum in a few days and will start running above 750.

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Whenever you take a home loan, car loan or personal loanm etc., from the bank, the first thing the bank looks at is your Cibil score. Cibil score ranges between 300 to 900.

It is through credit score that banks estimate whether the person taking the loan is trustworthy or not.

The better your credit score is, the easier it will be to get the loan at a low interest rates.

The low Cibil score, on the other hand, will make your case weak before a lender for any credit-related facility.

Generally, a Cibil score of over 750 is considered good.

But sometimes due to some of our mistakes, the Cibil score gets spoiled.

In such a situation, what is the way to improve the Cibil score?

If you also want to know this, then first of all, you will have to correct some of your mistakes.

After correcting the mistakes, your score will also gain momentum in a few days and will start running above 750.

Not paying EMI on time

If you have taken a loan, you need to repay your equated monthly installments (EMIs) on time.

If you do not pay EMI on time, it directly affects your credit score.

To ensure that none of your EMIs are skipped, you can choose the option of auto debit from your bank account.

This will automatically deduct the prescribed amount on the prescribed date.

Do not take many unsecured loan

Unsecured loan is a loan which does not require any collateral, like a personal loan.

One should never take more than two unsecured loans.

This affects your Cibil score.

Choose this type of loan option only when you are in an urgent need of a loan and there is no way out. After taking the loan, repay it on time.

Taking multiple loans at once

Do not take multiple loans at the same time.

This also has the possibility of damaging your credit score.

Many times, due to multiple loans running simultaneously, the EMI becomes high and it becomes difficult to repay it on time. In such a situation, your credit score deteriorates.

Try not to take multiple loans simultaneously.

Become a guarantor thoughtfully

Take the decision of becoming someone's loan guarantor or joint account holder very carefully because, if your joint account holder or the borrower fails to repay the loan or misses EMIs regularly, your credit score will also be affected.

Spending excessively on credit cards

Excessive spending on credit cards also affects your credit score.

This shows that you spend your money without thinking.

To improve your score, it is important that you spend only 30 per cent of your credit limit per month.

Never take loan

If you have never taken a loan nor used a credit card, your credit score remains in minus.

In such a situation, banks are not able to understand whether you are trustworthy or not.

Even in this situation, banks hesitate in giving loans. In such a situation, you have two ways to improve your credit score-

First method:

You should take a credit card from the bank, start using it and make payments on time.

With this, your loan will start in the banking system and your Cibil score will be updated in two or three weeks.

Second way

You should make two small FDs of Rs 10,000 each in the bank.

After opening the FD, take a loan against it under overdraft facility.

As soon as you withdraw money from your FD under overdraft, your loan will start and soon your credit score will increase.

Loan settlement

In fact, loan settlement is also mentioned in your credit history.

When you settle the loan, 'settled' is written in your loan account.

This means, that the loan borrower has not repaid the stipulated amount.

Due to this, the credit score may reduce by 50 to 100 points or even more.

The way to improve this is that when you become financially capable, you pay your dues i.e. principal, interest, penalty and other charges, in which, you were given concession during loan settlement and get the loan closed.

After this, take a certificate of no due payment from the bank.

After closing the loan, the word settled will be removed from your credit history and your credit score will be corrected.