Your CIBIL score is extremely important solely because it influences your ability to get a loan from banks. Your credit history, which includes your past credit payments and payment patterns, determines your CIBIL score. To find out how to improve CIBIL score, you must be well equipped with your credit history and all the past payments made by you.
Improving your CIBIL score is essential for obtaining better loan terms, interest rates, and credit facilities. Here are some pointers to elevate your score:
By following these guidelines and being diligent with your financial decisions, you can effectively improve and maintain a robust CIBIL score.
Also Read : Experian Credit Score
Also Read : TransUnion CIBIL Score
Your credit score comprises a three-digit number, CIBIL Score Range from 300 to 900. It depends on your credit files and history and past payments made by you.
Before we move on to how to increase CIBIL score immediately, let’s find out what a decent credit score is that will make you a capable borrower of loans.
|Credit Score||Approval Chances||Creditworthiness|
|700-749||Very high||Very good|
|Less than 600||low||Urgent actions required|
If you have a credit score of 750 - 900, you can easily take out loans from banks without any hassle. For a credit score of 700 to 749, chances are you will be examined well before you get a loan.
Make sure you understand the ideal balance for the principal amount you intend to take out as a loan before moving to how to improve CIBIL score.
Additional Reading: What is CIBIL dispute?
There are several reasons that can affect your credit score, which eventually determines whether or not you will be approved to take out a loan. Knowing the reasons that influence your CIBIL score is as important as figuring out how to increase CIBIL score fast.
Here is a list of all the potential reasons that eventually decrease your credit score.
Making late payments
If you have the habit of making frequent late payments, your credit score will always be on the lower side. Even a single late payment can affect your CIBIL score a lot.
Late payments not only indicate you are incapable of planning your finances properly but also make you an incapable borrower of loans.
The best way to get rid of such risks of late payments is by opting for a debt consolidation plan.
Taking out multiple loans
Before you move on to figure out how to improve CIBIL score, make sure you are aware of taking out multiple loans from multiple lenders. It may cause late payments and affect your CIBIL score eventually.
It will show that you are financially not capable enough to make your monthly payments on time. It can significantly impact your CIBIL score. When you take out multiple loans and fail to make your payments on time, your lenders may send inquiry requests to credit rating agencies. It affects your credit score a lot. It will eventually decrease your CIBIL score.
High utilisation of CIBIL limit
The credit limit you have refers to the maximum amount you can spend through your credit card. Credit limits are set based on your capacity of making repayments. If you're wondering how to increase my CIBIL score, make sure you keep track of how much you spend from your credit limit.
If you constantly spend more than 50% of your credit limit, it will affect your credit score immensely. Ensure that your expenses remain within 50% to avoid a decreased CIBIL score.
Additional Reading: How to calculate credit score?
Additional Reading: Equifax Credit Score
Once your credit score drops, it will take a lot of time to improve your credit score from scratch.
It can be really difficult at times, but it is not impossible. Keeping a constant track of your credit history can help you rebuild your credit score sooner than you think.
A minimum credit score of 750 is considered to be a decent CIBIL score to apply for loans.
If you have less than 700 or 650 CIBIL scores, make sure you focus on improving your scores.
It can take anything between four months to 12 months for you to become eligible to apply for loans. The duration depends on your current CIBIL score and your credit history for which you should check free credit score. If you have a CIBIL score of less than 650, it can take you more than eight months to recover from that stage.
Additional Reading: CRIF credit score?
Know how good your score is
Get insights on how to improve it
Unlock offers as per your score
The major steps that you need to take in order to have a strong credit score include repaying your credit bills on time, avoiding multiple loans, and limiting your credit score utilisation. Also, make sure you check free cibil score and download credit history to avoid such inconveniences.
800 CIBIL score is generally considered to be a decent credit score. Once you have a credit score of more than 750, you will become eligible to apply for loans from banks. 800 is a good credit score that keeps your approval chances on the higher side.
The major reason why your credit score might be stuck is that you are making late payments. Your lenders may send out enquiry requests to credit Card agencies that affect your CIBIL score immensely. Make sure you make your monthly payments on time to increase your credit score first.
Another possible reason is that you are probably using more than 50% of your credit limit every month. It affects your credit score a lot. Make sure you keep your expenses within 30% of your CIBIL limit so that sure scores increase fast.
Also Read : CIBIL Full Form
Your credit score is calculated using your past payment history. It is calculated between a number of 300 to 900 based on your credit history. If your credit score is 750 to 900, credit institutions trust you more for being a responsible customer who manages their finances well.
Keep making your payments regularly on a monthly basis and avoid late payments. Do not spend more than 30% of your credit score monthly so that you can easily get a CIBIL score of 900. Keep making your payments regularly on a monthly basis and avoid late payments. Do not spend more than 30% of your credit score monthly so that you can easily get a Sybil score of 900.
The longer is your credit history, the better it is w.r.t your credit score. Make sure you're keeping your EMIs on time to have a decent credit history.
To solve your CIBIL problem and improve your scores, understand why your score is low and what you can do to improve it. Do not forget to keep track of your credit history to analyse your credit scores and take the required steps to keep it around 800 to be on the safer side.
Additional Reading: Check CIBIL Score by Pan Card
Improving your CIBIL score immediately can be challenging, as credit scores typically reflect sustained patterns of credit behavior over time. However, there are some actions you can take that might have a quicker impact:
When thinking about how long it takes to improve a CIBIL score, consider the following:
Remember, while some actions can lead to immediate improvement, maintaining a healthy CIBIL score is a long-term commitment. Adopting and maintaining good credit habits is the key to sustained improvements in your CIBIL score.