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How to Increase Your Credit Score Fast

How to Improve Your CIBIL Score Immediately

CIBIL is one of the leading Credit Bureaus of India. Credit bureaus are in charge of generating reports based on an individual’s credit score. CIBIL score reflects a person’s credit history.

Lending institutions use CIBIL scores to evaluate the creditworthiness of loan seekers. It is also used in a wide array of credit-based financial products and for loan approvals.

Many lenders classify their customers according to their credit scores. The rate of interest offered by a lender will depend upon the risk associated with the borrower as well as the lender’s policy.

What is a Good Credit Score considered as?

CIBIL scores vary from 300 to 900. The higher the score, the better it is considered. A good CIBIL score would be 750 and above because that is an essential score to be able to get your loan sanctioned. If your CIBIL score is below 750, the bank/financial institution may decline your loan application outrightly or extend you a loan at a higher interest rate. Therefore, you should maintain a CIBIL score of 750 and above, as near as possible to 900.

Credit Score Range

CIBIL Score Range Inference
300-599 Extremely poor credit health, with high chances of application rejection.
600-649 Poor credit health, reflecting regular defaults. Slim chances of approval.
650-699 Average credit health; lending firm might require guarantors and levy high interest rates.
700-749 Good credit health; high chances of lending firm giving approval on loan, but with significantly higher interest rates.
750-900 Strong credit health, with excellent chances of loan approval with minimum interest rates. 

Achieving a decent CIBIL score exhibits good financial well-being and habits, thus improving the probability of getting an affordable loan sanction on flexible terms. With a good CIBIL score, the banks/financial institutions can assess your creditworthiness and capability to repay the borrowed loan timely.

You should concentrate on knowing the factors that affect your credit score and take conscious steps to enhance it. Nurturing a decent CIBIL score is always a work in progress, ever-evolving, and dependent on your financial maneuvers.

You can easily increase your CIBIL score over time. Let’s look at the following tactics that will assist you in building your CIBIL score.

Scroll down to know 10 simple tips which could help you improve your CIBIL score

1. Pay your bills on time

Make sure that you always pay your dues on time and in full. This includes Credit Card payments, EMIs, etc. To ensure that you have a disciplined approach, a good practice is to set up payment reminders, as well as subscribe for the e-nach facility offered by most borrowers including Fullerton India so that your monthly EMI is auto debited from your account on a pre-set date.

How you settle your outstanding debt directly and substantially impacts your credit score. When you delay payments on your EMIs, you incur penalty charges. This lowers your credit score.

2. Flag credit report discrepancies

Sometimes, your credit report may reflect discrepancies. For instance, if a lender from whom you have borrowed money has been slow to report your timely payments to CIBIL, your credit score could be low.

If you are a borrower, you should check your CIBIL score regularly. If you spot any discrepancies, you should have the same corrected immediately.

Many institutions allow registered customers to check their CIBIL scores for free. You can simply visit their website or app, register yourself and provide the details they ask for to access your credit score free of cost.

3. Choose different forms of credit

Individuals who have not borrowed money in the past will not have a credit history. This will result in a low CIBIL score. In order to build a healthy credit score, borrowers usually rely on a mix of credits. This includes unsecured and secured loans of both short and long duration.

This practice will ensure that the next time you apply for a loan, you will be able to enjoy both higher loan amounts and lower interest rates.

4. Limit credit utilisation

How to improve CIBIL score really fast? Avoid breaching your credit card limit. A good rule of thumb is to ensure that you do not exceed more than 30% of your monthly credit limit.

For example, imagine that your monthly credit limit is Rs. 10, 00,000. To ensure that you do not cross your limit of 30%, make sure that you don’t utilize more than INR 3,00,000. If you need more funds, pay off the existing dues to the extent possible before applying again.

Borrowers who regularly spend more than 30% of their credit limit can expect a lower credit score and higher interest rate on any loan sought. Those who are interested in knowing how to increase CIBIL score should refrain from spending without checking their expense account.

5. Good Repayment History

If you are looking for an easy answer for the question how to increase credit score, the most obvious answer is to have an excellent repayment history and good debt. This is the reason why many people who are trying to increase their CIBIL score avail a personal loan and repay the same through monthly EMIs as it helps in creating an excellent repayment history.

If you have handled your home or car EMIs well and paid them in full according to the terms and conditions of the agreement, it’s called good debt. Good debts are always favourable to your credit rating. It will boost your CIBIL or credit score.

Leaving good accounts and old debt on your credit report is a good way to improve your credit score.

6. Don’t borrow often

Every time you apply for a credit card, loan, or any form of credit, the lender will reach out to CIBIL for your credit report. This inquiry will be reflected in the report. Every time a lender performs a hard inquiry on your credit report , your score may drop a couple of points. This drop becomes a lot worse for those who apply to multiple lenders within a short period of time (or at once).

A tendency to borrow betrays a behaviour that is credit-hungry. Furthermore, it also diminishes your score even if you may have had the means and the intention of repaying the debt on time.

7. Increase your credit limit

If you cross the monthly credit limit on your credit card often, you can consider approaching your bank and ask for an increase in your credit limit. When your credit limit increases, your credit utilisation ratio will decrease.

This will portray you as an individual who is in control of his or her expenses which, in turn, will reflect positively on your credit score.

8. Maintain older credit cards

Generally, people deactivate the credit cards that we no longer require. However, you should maintain them as long as you can pay your bills. Keeping older credit cards can help you to generate a solid and lengthy credit history which will assist you in improving your credit score.

9. Opt for a longer loan tenure

Typically, EMI eats into your monthly income. Sometimes it may become too heavy on your pocket. So, always try to choose a longer tenure for repayment while borrowing a loan. This habit will ensure that your monthly in-pocket expenditure is low and you can make payments on time. As a result, your CIBIL score will also increase when you don’t delay, default, or skip paying EMIs.

10. Never Give a Hint of Risk

The CIBIL scoring models are fabricated to investigate early indications of risks and stress in your profile.

For example, not making credit card payments on time, revolving credit, or suddenly paying less due amount than the total dues is the first indicator of stress in your credit profile. Other signs of stretched cash flow include taking a cash advance or using cards to meet business expenses.

We hope that this article has helped you understand how to improve CIBIL score immediately.

Apply for a home loan online from SMFG Grihashakti website at reasonable interest rates

*Terms and conditions apply.

Must Read :Minimum CIBIL Score Required for Home Loan

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
CIN number: U65922TN2010PLC076972

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