CIBIL Score : Your CIBIL score is a key indicator of your creditworthiness, ranging from 300 to 900. A high score indicates timely repayments and responsibly managing your finances, while a poor score indicates a lack of credit or late payments. If your CIBIL score has dropped, there’s no need to panic; with your efforts, you can improve it by the end of the year.
What is CIBIL score?
Your CIBIL score reflects your credit history and financial behavior. A score between 650 and 700 or higher is considered good, increasing your chances of loan or credit card approval. A better score also benefits interest rates and credit limits, providing financial security.
How to improve CIBIL score?
1. Pay the deposit balance
The most important thing is to pay off all outstanding balances, as late payments negatively impact your score. If you have multiple credit cards or loans, it’s best to consolidate them into a single loan to streamline payments.
2. Keep EMI at 30% of monthly salary
Pay no more than 30% of your monthly net salary as EMI. This demonstrates your repayment capacity to the lender and strengthens your credit profile.
3. Use credit cards in a balanced manner
Keep credit card balances low and apply for new credit wisely. Regular payments improve your credit history.
4. Have a balanced mix of secured and unsecured loans
Don’t rely solely on unsecured loans like personal loans or credit cards. Secured loans like home loans or auto loans can also strengthen your credit profile.
5. Check your CIBIL score regularly
Check your credit report periodically to correct any inaccuracies. This will help you monitor your score and take necessary steps to improve it.
A better CIBIL score opens up better loan approvals, lower interest rates, and more financial options in the future. So, by the end of this year, take these simple but important steps to improve your creditworthiness and move towards financial security. Keep in mind that improvement is a continuous process and can only be achieved through regular discipline.