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How to Improve CIBIL Score?

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.

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What is a Good Credit Score?

Your credit score comprises a three-digit number that generally ranges 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 ScoreApproval ChancesCreditworthiness
750-900excellentexcellent
700-749Very highVery good
650-699goodfair
600-640Considerably difficultdoubtful
Less than 600lowUrgent 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?

Reasons for Low CIBIL Score

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?

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Ways to improve CIBIL score

If you are concerned with your CIBIL score and or wondering how to increase CIBIL score, we have got you covered.

Take the following steps in order to improve your CIBIL score:

  • Repay your dues properly if you want to improve your CIBIL score fast. Those who have an outstanding credit score of 750- 900 make sure they pay their credit bills on time. Do not make late payments, for it can badly affect your CIBIL score.
  • If you keep spending more than 50% of your credit limit every month, it will show you as someone who is not able to manage their finances well. Limit your expenses and make sure you spend around 30% of your credit limit per month on maintaining a good CIBIL score.
  • To find out how to increase CIBIL score, you must keep track of your credit report. Many customers have errors in their credit reports at times. Make sure you keep checking your credit history to avoid such inconveniences.
  • Do not apply for credit cards constantly. Although credit cards are quite helpful while you apply for loans, having an excessive number of credit cards can make you look like a counterproductive person. Maintain a gap before applying for multiple credit cards. Make sure you apply for credit cards when you know that you can repay your monthly amounts in time.
  • Increase your credit limit to lower your credit utilisation reports instantly. It will make your CIBIL reports better.
  • Make sure you keep your old good loan account on your credit report so that it helps you achieve a good credit score. Make your good accounts active if you have a good repayment history for a long time.
  • Do not miss or delay your payments, for it will give a hint of risk to the credit scoring models. Suddenly paying less than the entire amount or missing on credit card payments can eventually decrease your credit score.

Make sure you implement these ways if you are wondering how to increase CIBIL score fast. Do not take your credit scores lightly, for it will affect your loan approvals by banks. Keep track of your credit history and do the needful to ensure your CIBIL score is reasonable enough before applying for a loan.

Additional Reading: What is cibil grievance?

How Long Does it Take to Rebuild 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. 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: What is CRIF credit score?

How much credit score is required for a personal loan?

Around 700 to 900 credit score is considered to be a great score when you apply for loans. Chances are, you will always be approved to take out loans when you have a good credit score.

Suppose your CIBIL score is less than 750, your approval chances or medium. However, when you have a credit score of less than 650 or 600, work on improving your score before applying for loans.

If you are thinking of how to improve CIBIL score, first analyse and understand why you have a poor credit score. Work on improving your score up to around 750 so that you become eligible to take out loans whenever needed.

Additional Reading: Check cibil score for personal loan

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How to Improve Cibil Score FAQs

How can I make my CIBIL score strong?

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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 to keep track of your credit history to avoid all sorts of errors and inconveniences.

Is 800 a good CIBIL score?

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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.

Why is my CIBIL score not increasing?

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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.

How is CIBIL score calculated?

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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.

How can I get a 900 CIBIL score?

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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.

How can I solve the CIBIL problem?

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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.