How much time it takes to improve CIBIL score?

Learn how long it takes to improve CIBIL score Your credit score is a critical three-digit number that significantly impacts your financial life. For many Indians, understanding how many days it will take to increase CIBIL score is crucial when planning to apply for loans or credit cards.

While there is no overnight solution, understanding how much time it takes to improve CIBIL score can help set realistic expectations and guide your credit improvement strategy.

Understanding CIBIL score

The CIBIL score is a three-digit numeric value ranging from 300 to 900 that reflects your creditworthiness. A score of 900 or higher is considered excellent, while most lenders prefer a minimum score of 750 to approve loan applications.

Four major credit bureaus in India provide credit scores: TransUnion CIBIL, Experian, Equifax, and CRIF High Mark. A strong score demonstrates trustworthiness to lenders, potentially resulting in quicker approvals and more favourable terms.

Wondering how much time it takes to update CIBIL score? It depends on when your creditors report to the bureau, which typically happens every 30-45 days. Understanding this reporting cycle is crucial for knowing how to increase CIBIL score faster.

How long does it take to improve CIBIL score?

The CIBIL score changes timeframe varies significantly based on your starting point and financial actions. It's essential to know how long it takes to improve CIBIL score. Most people require 4-12 months of consistent positive financial behaviour before becoming loan-eligible again.

If your score is between 650 and 700, reaching the desired 750 mark might take a few months of disciplined credit management. However, if your score is below 650, the time it takes to improve your CIBIL score increases significantly, potentially by a year or more. So, knowing how often does CIBIL score update is important.

Several elements influence the timeline for your CIBIL score update frequency:

• Payment history (35% impact on score)
• Credit utilisation ratio (30% impact)
• Length of credit history (15% impact)
• Credit mix (10% impact)
• Recent credit applications (10% impact)

For those with minimal credit history, establishing a good score can take 3-6 months of active credit use. Conversely, recovering from serious credit issues, such as defaults, may require 1-2 years of consistent positive behaviour before seeing substantial improvement.

Steps to improve CIBIL score faster

Now that you know how much time it takes to increase credit score, there are ways to improve CIBIL score. To do so, you can implement these strategic actions:

Prioritise timely payments: Nothing impacts your score more positively than a consistent record of on-time payments for all loans and credit cards.

Maintain low credit utilisation: Keep your credit card balances below 30% of your total available limit. Maintaining this ratio can significantly reduce the time it takes to increase your credit score.

Develop a healthy credit mix: Balance secured loans (like home loans) with unsecured credit (like personal loans) to demonstrate versatile credit management skills.

Retain older accounts: Avoid closing old credit cards or accounts as they contribute positively to your credit history length and can be a good way to improve CIBIL score.

Review: Monitor your credit report regularly to check for inaccuracies and dispute any errors promptly, as this can help prevent unnecessary score reductions.

Limit new credit applications: Submitting multiple applications within a short period can signal financial distress and negatively impact your credit score.

Use credit responsibly: Maintain active but moderate credit use to establish a positive credit history.

How often is the CIBIL score updated?

When understanding how long to improve CIBIL score, knowing how the score is updated is also important.

CIBIL scores update frequency is usually every 30-45 days, depending on when your lenders report account activity. So, if you want to know how much time does it take to improve CIBIL score, know that it is partly dependent on this reporting cycle.

Some key points about score updates that can help you boost credit score quickly are as follows:

• Lenders typically report to credit bureaus every month.
• Not all lenders report on the same schedule.
• Some changes may take up to two statement cycles to reflect.
• Major adverse events, such as defaults, may be updated more quickly.

This update frequency means that positive changes in your financial behaviour might take 1-3 months for the credit score recovery time.

Conclusion

Improving your CIBIL score is a marathon, not a sprint. How many days it will take to increase the CIBIL score depends on your starting point, the severity of negative factors, and consistently positive financial habits. By understanding how much time it takes to improve your CIBIL score, you can set realistic expectations and celebrate minor enhancements along the way.

Axis Bank's Personal Loan options offer flexible solutions with competitive interest rates for individuals seeking financial assistance while rebuilding their credit. Their personalised loan offerings consider various factors beyond just credit scores, making them accessible even to those working on credit improvement.

Also Read: Boosting your credit score after a slip-up

FAQs

Can my CIBIL score improve within a month?

While minor improvements are possible within a month, significant increases typically require longer. Banks inform the credit bureau monthly, after which your credit score is recalculated. Moreover, in the case of serious defaults, like closing off the loan at a lower amount, the CIBIL score improvement time might be more than one month.

How does timely loan repayment impact my CIBIL score?

Timely repayments constitute approximately 35% of your CIBIL score calculation, making them the single most influential factor. A consistent history of on-time payments can significantly accelerate the time it takes to improve the CIBIL score. So, it is recommended to repay the loan EMIs timely to maintain a high credit score.

How often should I check my CIBIL report for updates?

You should check your credit score to ensure everything is in order. Experts recommend checking your CIBIL report quarterly to monitor progress and identify inaccuracies to increase your credit score fast. This frequency aligns well with the time it takes to improve your CIBIL score, allowing you to track meaningful changes without becoming overly concerned about small fluctuations.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.