Ways to improve your CIBIL Score | Fusion - WeRIndia

Ways to improve your CIBIL Score

Ways to improve your CIBIL Score

A good credit score or CIBIL score is essential to get loans at cheaper rates. CIBIL score indicates the creditworthiness and credit history of a person. It ranges between 300 and 900.

Banks and financial institutes consider a score above 750 as good. They offer loans at a cheaper interest rate to people with a good credit score.

You can improve your CIBIL score using the following ways:

Pay your loans, credit card bills, and other dues on time. It helps improve your credit score. If you are struggling to repay EMIs, approach your bank to restructure your loan. In this way, you can ensure that the loan will not become a burden.

Also, it is not good to pay the minimum amount due on your credit card as it will become a burden later. Moreover, banks charge interest on the amount you have to pay. So, pay your entire credit card bill.

As credit utilization ratio is one of the most significant factors for improving credit score, maintain a proper ratio. Do not use your entire credit limit while using a credit card. Keep your credit utilization ratio is 30% or less. That means, do not use more than 30 percent of the credit limit of your credit card to avoid a negative impact on your credit score.

Check your credit reports regularly. If you find any errors in it, contact the concerned persons and make it correct.

Do not apply for a loan or credit card repeatedly if you are rejected. Normally, people apply to another bank for a loan or credit card, if they have been rejected by one bank or financial institute. But applying to another bank immediately after being rejected at one bank impacts your credit score negatively.

Settlement of loans or credit cards will also impact your CIBIL score negatively. Banks offer loan settlements to borrowers when they cannot repay the entire amount due. That is, when borrowers approach banks for loan settlement, they will be allowed to pay off their loans for a lesser amount than they have owed to banks. However, it impacts their credit score.

While opting for loans, choose different types of loans like secured and unsecured. Also, opt for both short-term and long-term. Repay them on time to improve your credit score.

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