Increase Your CIBIL Score: Almost everyone has heard of the CIBIL score these days, but many people don’t clearly understand what it is and why it’s important. Simply put, a CIBIL score is a number that indicates whether you’ve repaid your previous loans or credit card payments on time. Banks and financial institutions use this score to determine whether you should be granted a loan or a credit card.

Sometimes, a CIBIL score deteriorates due to various reasons, making it difficult to obtain a loan or a new credit card in the future. The good news is that a poor CIBIL score can be gradually improved simply by adopting the right methods.

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How to Improve Your CIBIL Score

First, be sure to check your CIBIL report regularly. Sometimes, incorrect information, outdated data, or duplicate entries can cause a low score. If any errors are noticed in the report, they should be corrected immediately. Having accurate and updated information helps improve your score.

The easiest and most effective way to improve your CIBIL score is to pay all bills and EMIs on time. Whether it’s a credit card bill or a loan installment, late payments negatively impact your score. Making timely payments is considered good financial discipline.

It’s also important to use your credit card or loan limit wisely. Avoid spending the entire limit and try to use only 30 to 40 percent. This proves that you spend as much as you need and can handle the payments.

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Don’t close old credit accounts unnecessarily. Long-standing loans or credit cards strengthen your credit history. Opening new accounts is fine, but maintaining old accounts is also beneficial for your CIBIL score.

If you’ve ever missed a payment or a loan default has occurred, don’t ignore it. Pay off the outstanding amount as soon as possible and resolve the matter by contacting your bank or credit agency. This will clear your report and gradually improve your CIBIL score.