How to Improve your CIBIL Score?
When you apply for a loan or a credit card, your credit score will be checked in additional to the other eligibility conditions, and the loan will be approved only if your score is higher than the minimum score specified by the lender. Because your credit score is so significant when it comes to loans, it is important that you improve your credit score. Before we get into how to improve your CIBIL score, it's important to first understand what the Credit score.
What’s a credit score?
A credit score is a number that represents a rating of how likely you are to repay a loan and make the payments on time. A credit score can range from 300 to 900 points. The higher your credit score, the more likely you are eligible to get a loan or a credit card. In brief, one of the most important variables in determining whether an applicant is eligible for a new line of credit is his creditworthiness.
How to Improve and Increase Your CIBIL Score Immediately?
A personal loan requires a CIBIL score of 700 or above. Anything less than 700 could be cause for concern. However, all is not lost. While your credit score will not improve overnight, you can take steps to improve credit score if you want a high score to easily avail a loan. So, here are some simple methods to help you understand how to improve your CIBIL score.
1. Repay your loans on time
Paying outstanding credit bills can help in improving your credit score. Getting into the habit of only paying minimum amount due when it appears on your credit card statement may help you avoid late payment fees. This minimum payment is about 5% of the billing amount for that cycle. However, this adds interest and taxes to the cost in the next cycle, resulting in a mountain of debt. Paying your bills on time not only keeps interest from piling up, but it also helps to improve your credit score in the long run.
2. Check Your Credit Report
The first thing you should do before applying for a loan is to check your credit score or report on a regular basis. Checking your credit report is a smart idea Because it will tell you two important things about your credit score. First, it will display any defaults or late payments that have reduced your credit score. Second, it provides the information supporting the reason behind the low/high credit score. This helps in fixing the bad credit score.
3. Setup Payment Reminders
Paying your bills on time can boost your credit score in a matter of months. A single late or missed payment can have a huge negative impact on your credit score. To make sure you pay your bills on time, make notes the payment deadlines for each account in a planner or calendar and set up online reminders. You should also think about enrolling in auto payments through your lender or bank to have your payments deducted directly from your bank account
4. Clearing existing loans
Try clearing your existing loans if possible. It will have a good impact on the credit score and the credit report as well.
5. Manage existing credit cards
If you have a credit card that isn't being used, start using it, make sure you pay the bill on time. Getting too many credit cards is not recommended, and if you do, be sure that none of your credit card accounts are inactive. Closing an inactive credit card account will have a bad impact on your credit score, therefore if you have unused credit cards, make some payments with them and pay the bill as soon as possible.
6. Increase your Credit Limit
If you find yourself crossing the monthly credit limit on your credit card transactions and if you think the transaction amount cannot be reduced, you must approach the bank and ask for an increase in the credit limit. This is a positive indicator that you have control over your costs, and it can help you improve your credit score.
7. Track your expenses
Keeping track of how much you earn and how much you spend on a weekly or monthly basis also known as your income to expense ratio can help you watch your spending, determine what is avoidable and what is not, and better manage your expenses. Your EMI and loan payments are not avoidable expenses, but ordering takeaway is. You can keep a diary, detailed excel files and programmes, or just use a personal finance application to better track your costs.
8. Be Patient
Improving your credit score does not happen overnight. It takes time & consistent practice to improve your credit score online in Bangalore. All of the points mentioned above are healthy credit habits that you should adopt in order to have a good credit score.
Conclusion
In short, if you want to improve credit score, focus on reducing your high outstanding amounts and maintain a healthy credit history. Keep a tab on your CIBIL score so that you can take corrective measures when the score reduces. Calculate your credit score online, free of cost and check it every six months. You may not be able to fix your credit immediately, but with patience and consistency, as well as a little support from Trinity Credit Solution, you can achieve that in short period.
