CIBIL Score Tips: In today’s time, it has become common to take a loan from the bank for buying a house, marrying daughters, any big expense or emergency. But when you apply for a loan and the bank rejects your request, one of the main reasons for this is your CIBIL score. CIBIL score is a data of your credit history, which tells how you have paid your loan or credit card EMI last time. If your CIBIL score is not good then banks hesitate to give loans. So let’s know what you can do to improve your CIBIL score. Consider 5 ways here.
Make EMI and bill payments on time
This is the most important and easiest method. Your CIBIL score depends on your past payment history. If you are paying your credit card bills, home loan, personal loan or any other EMI on time, then your CIBIL score remains good. Delay or default in bill payment can cause serious damage to the score. So always make sure to pay on time.
Your credit report may sometimes contain errors, such as showing a loan payment that you never made. Such errors can affect your score. So check your credit report every 6 months and if there are any errors, apply for correction immediately.
Keep your credit utilisation rate low
Credit utilization rate means how much percentage of your total credit limit you are using. For example, if your credit card limit is Rs 1,00,000 and you are spending Rs 80,000, then your utilization rate will be 80%, which is very high. High credit utilization can lower your CIBIL score. It is better that you do not use more than 30% of your credit limit.
Do not apply for more credit again and again
When you apply for loans or credit cards repeatedly, it is called a hard inquiry, which affects your score. Banks consider this a negative sign as it shows that your financial situation is not stable. So do not apply more than necessary.
CIBIL Score: Do not close old and inactive credit cards
Many people think that old credit cards that they do not use should be closed. But doing so makes your credit history look shorter and can lower your score. So keep your old credit cards active, even if you rarely use them.
Improving your CIBIL score is not a magic trick but a result of your financial behaviour. If you make regular, timely payments, manage your credit properly and apply for loans or credit cards carefully, your CIBIL score will gradually improve.
A good CIBIL score not only helps you get a loan from a bank, but it can also help you get a loan at lower interest rates. So understand your financial responsibilities and manage them properly so that your financial position is strong and you do not face any problem in getting a loan from a bank in the future.
