Top 5 CIBIL Score Improvement Factors

Improve Your CIBIL Score

Improve Your CIBIL Score

Credit score is usually provided by Credit Information Bureaus that maintain credit histories of people provided by registered credit companies. Credit Information Bureau India Limited or CIBIL is a primary industry to provide . It was founded in the year 2000 and plays a critical role in the financial scheme of the nation. Check the top 5 CIBIL score improvement factors to optimise your score better.

What Is A Credit Score?

A Credit score is detailed information assigned to every individual that is based on an individual credit report.  Credit score is the display of your creditworthiness to get a new loan or credit . A good credit score indicated a good credit score & history .  Also your  credit score signifies that a person pays his credit on time also in turn helps in availing a good loan interest  rate.

An overall credit report  for any individual can stand anywhere between 300-900. A score of more than 700 is generally understood to be a good credit score while anything below that is usually  not preferred by banks. Data also indicates that loan applications are generally green single  for you as a customer with a score of 750 and above.

A credit score  that is bad can also  ruin the chances of availing credit at good rates and sometimes achieving a credit itself can become an absolute tough nut. Hence if you currently have no idea about your CIBIL score then you check your credit score now. 

Some Negative Factors Affect Your Credit Score

Did you know that there are certain factors that affect and  can make or easily break your credit score? , Hence, here are some of them which is discussed below;

  • Payment history and the number along with a frequency of payment defaults or delays can affect your credit score
  • A sum amount of debt  taken by you at any time
  • Types of credit that you have borrowed like e.g,. Personal loans, car loans, credit cards
  • The Number of latest credit requests that is  made to various different lending entities.
  • The amount of available credit that you have used can be also a major factor that can affect.

Also Read: Do You Know How A Low Income Affects Your Credit Score?

Factors Behind CIBIL Score improvement

Timely Payments

If your credit score is not upto the mark currently, you have to be extra careful along with  prompt in paying off all your credit card bills along with  other bills on time so that your free credit report does not show any major defaults.

Make online payments keeping in mind how much time your transaction might take. Hence paying by cheque and  ensuring that you drop the cheque timely a few days before the bill due date. That also ensures timely payment even in the face of delays which cannot be controlled.

Abstaining From Too Much Of  Credit

It is a common thing to get calls and emails from various financial institutions that give a credit card. Sometimes, if you have the view that having multiple credit cards credit will make your life easier. Balance transfer and other card benefits are also supposed to make our  financial ife flexible.

However, there are people who have no idea owning many credit cards. That shows we are hungry for more credit and it also lowers our chances of getting any additional credit if it is actually required.

Also, multiple credit cards can appear to be very difficult for a person to keep a track of payment that is  due  and will enhance the chances of default and late payment.

Good Use Of Credit Cards

Your Credit cards are usually great and are an apt financial tool  that you can own. They provide you the credit  that will enable you  avail  with many benefits too , like reward points along with air miles. Your Credit cards also help you to roam cashless without worrying to refrain from every other ATM.

However, all these benefits are applicable only if the cards are used optimally. Reaching beyond your credit limit every month can be a bad move. Sometimes , closing a credit card suddenly isn’t at all a good idea unless you obtain a NOC from your credit card provider.

Having A Right Mix Of Secured With Unsecured Loans

Unsecured loans like personal loans and car loans generally can  impact the credit score of a person. So, secured loans like home loans, are more invested towards asset creation and can also impact your CIBIL score positively. Hence, you have to minimize the unsecured component of your credit portfolio to influence your credit score positively. Having the right mix of both secured and unsecured loans also helps.

Check Your Credit Report

If you have a bad credit score or find any credit report problems, the first thing you have to do is to  obtain a copy of your credit report only  by applying for it on a credit bureau like the CIBIL score. In order to check your CIBIL score you should have all the information like your name should be correct and up to date. If in case no, then you can report about CIBIL score immediately so that your credit score isn’t at all  negatively impacted. Also, making payments on time or also rectifying defaults and delays, can make sure that your credit card issuer or bank records and report this about CIBIL score.

Avoid Applying For Too Many Loans

This one of the common mistakes that you should avoid is by applying to multiple banks .Banks tapping can find out your credit score. It will depict you as desperate for credit. So, whenever an enquiry is carried out about CIBIL score, it will reflect on your CIBIL score & report. The higher the number of hard inquiries, the more your CIBIL score will  dip.  Also there are many good ways to increase your CIBIL score that is by keeping your inquiries to a minimum and obtaining a copy of your score personally. After  you know where your credit score stands and if it is below expectation, then you will of course prepare to pay higher rates on loans. Seeking  out those banks that will lend you money at the most affordable rates rather than approaching other banks.

Also Read: How Late Payments Affect Your CIBIL Score?

Manage Your Finances

Sustaining  finances is of utmost importance for anyone. Also it  provides you to achieve your  goals as they can help you lead a life peacefully. Also unknowingly, trying your best, sometimes your finances can be messed up and lead you in trouble in day-to-day life , while you are applying for a credit card or a loan. There are few aspects that can definitely guide you to have control on your credit & finances.

Planning Your Budget

Everyone should be realistic and be grounded when it is about managing your finances. Also, spending smartly as per your monthly salary is crucial to avoid the risk of falling in debt.  When you plan to shop, make and make a list of items and figure out whether you are buying or spending that much amount will be feasible. All  such precautions can really help you increase your savings.

Validate Your Credit Report

Tracking Credit Report on a regular basis is very crucial . Now, get your CIBIL report or subscription depending on the report as it will enhance your credit score. Credit report can explain all the factors in detail that can increase or decrease your credit score. So, knowing what your faults are can enable you to avoid repeating them at all  and later result in  a good credit report. You can also avail the free CIBIL score to know your current financial position.

Reduce Your Amounts

Paying all the bills on the right time is very important as it will prove positive for your credit score. Clearing the outstanding amount every  month will reduce every burden in future months. This can also boost your financial status.

Upgrade Your Financial Knowledge

Everyone has to enhance their savings. There are many but many are  not clear about the points that can dramatically impact one’s financial hold. A mandatory  good knowledge on credit reports along with credit report problems , interest deductions, can boost your credit score and can really help the credit score to go up.

Also Read: Types of Credit Scores and Its Importance in India

Ways to Improve your CIBIL Score 

Your CIBIL score is a representation of an  your creditworthiness. It represents your credit score and repayment behavior. Your credit score is something that you can simply ignore; especially if it’s bad. A you should look for ways to improve your credit score , if it is essential for availing a smoother and also  cheaper credit. Mentioned below are some of the most effective ways to improve your credit score.

Your CIBIL score is or should be of 750 and is considered as ideal. There are ways to improve your credit or CIBIL score .

Pay Bills On Time

Payment history will account for 35% of your credit score. Therefore it is necessary to pay all your bills each month on time. You have to ensure  delaying your payments as it negatively affects your CIBIL score. This is the most essential step to improve your credit.

Get Rid Of Debt Immediately

If you have any debt that is not paid dues, then clear them off at the earliest even after you have been delaying for a long time. Missing payments on your credit card will keep on reflecting in your credit history until you pay them off fully.

Maintain A Low Credit Utilization Ratio

Always advisable  not to exhaust your entire credit limit and don’t not spend over 50% of your credit card limit. The credit utilization ratio will account  for 30% of your credit score.

Close Old Accounts

Removing or deactivating every old account is necessary as it will harm your credit score also if you have a good repayment history. Your old accounts should have a long credit history and deleting them will negatively impact your CIBIL score.

Always Make Full Payments

It is very important to have to  pay the full bill amount. Do not pay the minimum amount due on your bills as it will reflect badly on your CIBIL score.

Hard Enquiries

If a  lender or a bank provides importance to check your CIBIL score, then the enquiry will be known  as a hard enquiry. Multiple hard enquiries can easily bring down your credit score. Thus, this will make sure to limit the number of hard enquiries.

Manage Credit Score And Credit Reports

Do you have a good Credit Score that is very essential to know about obtaining a banking product? It is not all surprising, also equally important for less requirements to be perceptible such as getting an employment offer or  renting a vehicle. There are many people who are absolutely familiar with  the concept of credit rating agencies . Your CIBIL score will basically show that you can  repay a mortgage. It needs data from credit reports to lessen the risk of bad debts. Your credit score and report provides a detailed description of your credit score and overall credit history . There are few known companies or credit rating agencies in India that can do the same task- CIBIL TransUnion, Equifax, Experian and High Mark.

Why Credit Management?

  • A powerful CIBIL score will keep you well-rated to be able to suffice the future banking requirements at a very lower cost.
  • You will be picked up by a premier financial institution for a better banking business.
  • It will keep you financially reputed all along the banking business.

Significance Your Free Credit Score

Your credit score can enhance your chances to get pondered under a mortgage, especially loans like home loans. Most likely you can also avail  lower interest rates on mortgages and can negotiate a lower insurance rate. A current loan like a home loan or mortgage can also be refinanced on a lower interest rate. Bankers can provide a lower processing fee with a flexible repayment option, for you get a home loan easily.

What Impacting Your Credibility Positively

  • Timely EMI payments
  • Managing your financial aspects properly
  • Use credit cards fairly
  • Make sure the correctness of Credit Reports

Ways To Use Your Credit Score?

  • Lenders now determine whether or not to give any mortgage
  • Insurance agents also has the power decide the premium to be offered to you
  • Employers also help you get highly responsible position
  • Utility helps to decide if you have or not collect deposit
  • Landlords can also determine whether or not to rent a property

Quick Facts On Credit Score

  • Availing services from a credit repair agency is a good idea as they cannot remove any details from your credit score and you will have  no control over your credit score.
  • Your credit details are sensitive and accordingly confidential that should not be shared easily .
  • CIBIL score isn’t only  authorized to make changes to your credit score It will record that only what is done under by the concerned financial institution can CIBIL make such modifications.

Also Read: What Is The Basic Difference Between A Credit Score And A Credit Report?

Summing Up

Managing the credit score shouldnt be a very difficult task if you follow the ways diligently mentioned above in the article. Because a credit score plays an important role to get a quick loan or credit at affordable loan interest rates, however if you are confused about how to go for an emi or interest rates to go for , then you can use a loan emi calculator, to get a loan in cibil score that you desire.