Is a low CIBIL Score worrying you? Here's how to improve your credit score?


A good CIBIL score showcases your creditworthiness, and also the lender will willingly offer lucrative interest rates to individuals with a good CIBIL score. Credit report unfolds your financial management, whether bad or good. It helps the lender decide whether you are a high-risk borrower or not.

CIBIL Score is a three-digit number given by one of the Credit bureau companies of India based on the borrower's credit history. Undoubtedly, the CIBIL score is essential for availing of secured or unsecured loans without any hindrance. CIBIL Score is a three-digit number given by one of the Credit bureau companies of India based on the borrower's credit history.

Therefore, a good CIBIL score showcases your creditworthiness, and also the lender will willingly offer lucrative interest rates to individuals with a good CIBIL score. Credit report unfolds your financial management, whether bad or good. It helps the lender decide whether you are a high-risk borrower or not.

Hence, if you are one of them, dealing with a low CIBIL score, keep your worries at bay and start thinking to boost up your CIBIL score. However, there is always a way to strengthen your CIBIL score by vigilance and following a few simple steps listed below.

Here are the factors that can rebuild your low CIBIL score:

Avoid default payments


Missed or delayed credit card payments or piling up of debts can occur due to several unavoidable circumstances like a delayed salary, a sudden illness, or financial mismanagement. These factors can be the reason to pull down your CIBIL score. But there is always a way to improve it by paying your debts or other financial obligations without any further delay.

Keep an eye on your credit report to prevent errors


Credit bureau companies may at times miss entering your financial records, resulting in an error that can reduce a credit score. Therefore, you must regularly track your credit report for rectifying discrepancies, if any. By correcting the errors in your credit report, you can enhance your low CIBIL score.

Restrict your Credit Utilization ratio


The ideal credit utilization rate is 30%. It would be best if you controlled your expenditure immediately. Credit utilization is one such factor that can affect your credit score, if not restricted to 30%. So, limit your credit card utilization to improve your credit score.

Escalate your Credit limits


If you are a regular credit card user, you must increase your credit limits to lower your credit utilization ratio and instantly improve your CIBIL score. However, suppose your credit card amount is lower, and your credit utilization rate is higher. In that case, you may be categorized as a high-risk borrower and lower your CIBIL score at the same time. So, it would be a smart move if you update your credit limit before spending anything additional. In this way, you can manage your finances efficiently and keep your credit utilization low for a better CIBIL score.

Check your eligibility to avoid rejection of loan


Eligibility criteria are crucial for the approval of a loan. If you do not meet the eligibility criteria for the loan, your loan application may get rejected. This can have a negative impact on your credit report and decrease your CIBIL score. So, before applying for a loan or a credit card, ensure you abide by the eligibility criteria for a loan to avoid rejection.

Keep old debt on your report


The old debts repaid in accordance with the agreed policy within the specified period boosts the creditworthiness and positively impacts your future credit or personal loan application. Also, if you have multiple accounts or credit cards, keep your prolonged accounts active, to show a consistent repayment history for future loan approvals with a stable CIBIL score.

Be tolerant and persistent in attitude


A CIBIL score does not build overnight, and it requires a lot of patience and constant effort to repair the credit report and enhance it. Therefore, you need to be tolerant in your approach by checking your credit report, different credit lines, spending behaviour, and timely payment of debts.

Bottom-line


Although CIBIL score is not the only criteria for getting the line of credit, it is essential to get a loan instantly at affordable interest rates. Hence, instead of worrying about a low CIBIL score, get started yourself with the above guidelines for a better and decent score.


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