Comprehensive guide to understanding and improving your CIBIL Score for better credit
A CIBIL Score, ranging from 300 to 900, represents an individual's creditworthiness based on their credit history. A higher score improves chances for loan and credit card approvals at favorable terms. We have brought you a comprehensive guide to understanding and improving your CIBIL Score for better credit.
A CIBIL Score is a numerical representation of an individual's creditworthiness, ranging from 300 to 900. A higher score indicates better credit health and increases the likelihood of loan and credit card approvals at favorable terms. To improve your CIBIL score, pay EMIs on time, clear credit card dues, check for errors, limit credit applications, use secured credit cards, maintain old accounts, and ensure timely payments on joint accounts. Regularly monitor your score to stay updated on your credit health. We have brought you some important ways to improve your CIBIL score.
What is a CIBIL Score?
A CIBIL Score is a numerical representation of an individual's creditworthiness, ranging from 300 to 900, based on their credit history and behavior. A higher score indicates better credit health and increases the likelihood of loan and credit card approvals at favorable terms.
Pay EMIs on Time
Set reminders or standing instructions to avoid late payments.
Clear Credit Card Dues
Pay off credit card balances by the due date.
Check for Errors
Regularly review your CIBIL report for inaccuracies and rectify them.
Limit Credit Applications
Avoid multiple credit applications in a short period.
Use Secured Credit Cards
Opt for secured cards to rebuild your credit score.
Keep Old Accounts Open
Maintain older credit accounts to show a longer credit history.
Monitor Joint Accounts
Ensure timely payments on co-signed or guaranteed accounts.
Longer Repayment Tenure
Choose longer tenures for manageable EMIs.
Increase Credit Limit
Enhance your credit limit to lower your credit utilisation ratio.
Maintain Credit Mix
Have a mix of secured and unsecured loans.
Reduce Outstanding Debt
Aim to lower overall debt levels.
Avoid Settlements
Try to pay in full rather than settling for a lower amount.
Use Credit Responsibly
Only borrow what you can repay.
Avoid Closing Accounts
Keep unused credit lines open to show available credit.
Limit Hard Inquiries
Minimise the number of times lenders check your credit.
Use Auto-Debit
Set up auto-debit for timely payments.
Track Credit Utilisation
Keep credit utilisation below 30%.
Regularly Check CIBIL Score
Stay updated on your score and any changes.
Financial Discipline
Maintain overall financial discipline to improve credit health.