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Know The Smart Ways To Improve Your CIBIL Score

Before sanctioning any loans or advances, financial institutions carry out several checks on applicants’ credit profile to ensure they can repay the loan liability timely. Among many such determinants, CIBIL score is one of the vital criteria that need to be fulfilled. This parameter signifies individuals’ financial record, repayment history, and other financial behaviours.

A 3-digit rating, this score can range between 300 and 900, where a score of above 750 is considered as excellent, making the holder eligible for most credit options. So, applicants must view their credit score before applying for a loan.

They can simply check CIBIL score without login on select online platforms to proceed for availing a debt tool that matches their score. However, if the rating does not qualify a loan product’s threshold requirement, applicants can adopt the following practices that can help improve this score.

Steps to take for credit score improvement

       Timely repayment to avoid default

The primary and most effective way to adopt for credit score enhancement is to make timely repayment. Whether it’s their credit card’s monthly bill or loan EMI, individuals should be careful about the due date. Repetitive defaults or late payments can prove damaging to the score as well as one’s credit profile.

To counter such occurrences, individuals can opt for standing instructions for timely payments so that they never miss the due dates. However, such initiatives may not reflect the result instantly, as credit score build-up can take time. Thus, after a significant period has passed, individuals can check CIBIL score without login for a positive impact.

       Maintain an ideal credit utilisation ratio

Credit utilisation ratio suggests the total amount that borrowers have already spent out of the entire credit amount available to them. The closer individuals go to the maximum limit, the more it can hurt their score. Thus, they are always advised to keep this ratio within 30% of the threshold.

For instance, if borrowers obtain a credit limit of Rs.30,000, they must not spend any more than Rs.9,000 for a given duration to build a promising credit report and the score. From a lenders’ perspective, when borrowers exceed the limit of 30%, it implies reckless use of credit that may lead to default and reduced repayment capacity, thus hurting the score.

       Clear all existing debts

When offering a loan, financiers prefer responsible credit behaviour that prioritises repayment. So, applicants with multiple loan accounts and credit cards can organise their finance and clear off all the dues as soon as possible. Individuals can utilise their salary increments, bonus, incentives, investment returns, and all other additional earnings to prepay the outstanding credit.

This way, they can save a significant amount from paying towards the interest as well.

       Create a prolonged credit history

Utilising credit for an extended period with zero default or late payment record can bear a positive impact on one’s credit score. It reflects that a borrower can repay all the dues in time as well, thus creating a credit-responsible profile for him/her. So, if individuals hold an old credit card or loan account, they must keep on utilising them with organised behaviour and make timely payments towards the dues.

       Maintain a balanced mix of credit

Reaching an excellent credit score without borrowing different credit instruments is challenging. However, obtaining only a single type of credit line does not help build a reliable credit profile as well. So, individuals should maintain a balanced mix of both unsecured and secured loans and repay timely. It would help create the impression that they can manage all credit products efficiently.

       Check reports for accuracy

Applicants should also view their credit report at regular intervals for accuracy. However, at first, they should know how to check CIBIL score for all recent updates. Any small error can hurt their credit profile, and consequently their eligibility for credit options.

Also, as checking the eligibility criteria is a vital part of the personal loan application process, individuals should also compare all the available options before selecting one. They should look for lenders such as Bajaj Finserv who offer personal loans at attractive interest rates.

Moreover, with improved CIBIL score for personal loans, borrowers can secure this advanced facility at better terms.

Also, this financial institution brings pre-approved offers that can assist applicants in obtaining a loan with minimum hassle and time. The offer is available on other credit products as well, like business loans and personal loans. Borrowers can look for their pre-approved offer by entering their mobile number and name.

So, other than the above-mentioned things individuals can do to improve personal credit score, they should also avoid multiple loan applications at one time. Each application invites hard enquiry about their financial profile, which is not considered a good indicator for borrower profile. So, along with checking CIBIL score without login from time to time, they must also follow all these methods for improvements.

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