7 Simple Tips to Improve Your CIBIL Score Quickly

Check whether your CIBIL report consists of any inconsistencies or not. Be aware that there might be situations when CIBIL makes a mistake and records incorrect information in the report. Such situations will bring down your credit score significantly. So, when you see that you have a low CIBIL score, the first thing you should do is check for any inconsistency in your credit report.

Your credit report will also list the delayed payments that have lowered your credit score. It also provides the reasons behind high/low credit scores. It would greatly help you to address the situation and improve your CIBIL score.

An important CIBIL score improvement tip would be to pay EMIs on time. Suppose you have used your credit card to pay for a high-end purchase, such as expensive home appliances and gadgets. Make sure you pay off the amounts in instalments in time.

If you have availed of a loan, then try your best to make timely repayments. CIBIL will consider these while coming up with a credit report.

You might argue that you have substantial savings. However, it doesn’t have any impact on your credit score. Even if you have huge savings but fail to pay off EMIs in time, you’ll see a negative impact on your CIBIL score. So, avoid missing EMI payments at all costs.

Paying off utility bills (water, electricity, or gas) and phone bills strictly within their due date goes a long way in improving your credit score. While it’s true that such details won’t be mentioned in your credit report, it goes a long way in illustrating your financially disciplined behaviour.

If the credit provider finds that you have failed to pay bills on time while analysing your credit report, then they might ask CIBIL to record it as a default. It will have a severe impact on your credit score. So, the easy way out would be to pay all your bills quickly.

Experts recommend keeping the credit utilisation ratio below 30% of the total available credit. Notably, the credit utilisation ratio is a percentage indicating the proportion of available credit you currently use. You can arrive at your credit utilisation ratio by dividing the amount of revolving credit you use by the total available credit.

Constant use of credit cards indicates poor control over one’s finances. On the other hand, if you check the usage of credit cards and lower its utilisation ratio, your credit score will improve considerably. Reducing the amount due every month will have an excellent effect on your overall credit score.

You must use credit intelligently. Avoid taking too many credits at a time. Take only one loan at a time. An effective way to improve your credit score is by paying off a loan before applying for another.

What will happen if you take multiple loans simultaneously? It will reflect that you need more funds and better financial management ability. It’ll bring down your CIBIL score drastically. 

Do you have any joint accounts? Are you part of any co-signed or guaranteed accounts? In such cases, you’ll be held equally responsible for missed payments and can experience a drastic lowering of your CIBIL score. Moreover, your joint account holder's negligence in paying off debt in time can affect your eligibility to access credit when required. Often, experts recommend people avoid being joint account holders or guarantors for loans to avoid the negative consequences of missed payments.

There are bound to be situations when taking loan is essential. Try to build up a good history of debt. For instance, if you take a loan, then try to opt for a longer tenure. It would ensure a low EMI.

Consider increasing your credit limit to build a good debt history. How? Well, it doesn’t mean you’ll have a lot of credit to spend. The trick here is to keep the credit utilisation ratio very low despite having access to much more credit. For this, you must always be in the know of your CIIBIL score, something that a CIBIL score calculator can help with.

When banks see you have a high CIBIL score, officials are assured of your high creditworthiness. It leads them to sanction credit applications more quickly.

With a high CIBIL score, you might receive home loans, personal loans, and even credit cards on favourable terms and conditions such as lower interest rates.

A high CIBIL score would help you get access to higher loan amounts and credit limits, in general. This is primarily because it indicates a lower risk of default.

Do you want to learn more about credit scores? Check out this blog on what credit score is and know the details.

● Checking an employee’s/potential candidate’s CIBIL score helps employers understand their financial background. It might be an essential step in the background investigation. A low CIBIL score indicates a lack of financial discipline and reduces the chances of one’s employability.

● A person’s CIBIL report establishes whether the person is trustworthy or not. A high CIBIL score ensures integrity and dependability - two valuable traits every employer seeks. So, this is another reason you should follow the 7 simple tips to improve your CIBIL score.