Credit Score
How to increase your CIBIL score?
'How to increase my CIBIL score' has become a common concern among borrowers seeking better financial opportunities. Your payment history, credit utilisation, length of credit history, and types of credit all influence this financial metric. The moment you ask, 'How can I increase CIBIL score?', these factors will help you understand and take steps to address them effectively. So, let's understand the concept and how can we improve CIBIL score.
What is a CIBIL score?
A CIBIL score is a three-digit numerical representation of your creditworthiness, ranging from 300 to 900. It plays a pivotal role in determining your eligibility for loans and Credit Cards.
Your CIBIL score is calculated based on several factors, including repayment history, credit usage, credit mix, and credit history. Lenders use this score to assess the risk associated with extending credit to you. Knowing how to boost CIBIL score to 700 or more will increase your chances of loan approval at favourable interest rates.
CIBIL score is calculated by authorised credit bureaus. You can obtain your credit report from any bureau, monitor and maintain your score, and then apply for credit, such as loans.
How to improve your CIBIL score?
If you are someone who asks - 'How can I improve CIBIL score', you are not alone. Here are some tips that help:
Pay your dues on time
Timely repayment of credit obligations is perhaps the most crucial factor in answering the query: how can I increase my CIBIL score? Set up reminders or standing instructions with your bank to ensure you never miss payment deadlines. Establish a consistent pattern of on-time payments to demonstrate financial responsibility and reliability.
Maintain a low credit utilisation ratio
Your credit utilisation ratio should ideally be below 30%. If you ask, 'how can I improve my CIBIL score quickly?', increase your credit limit while maintaining the same spending habits. Strategic management of your credit limits and balances is essential if you want to know how can you improve your CIBIL score.
Avoid multiple loan or Credit Card applications
Found yourself asking, 'How to improve my CIBIL score?', you should know this. Each time you apply for credit, lenders perform a hard inquiry on your credit report, which temporarily lowers your score.
So, how to increase CIBIL score immediately?
Research thoroughly and apply only for credit products for which you're likely to qualify.
Monitor your credit report regularly
Your credit report gives a complete picture of your credit behaviour. It is created based on the information provided by your existing lenders. In some cases, the CIBIL report might have an error due to missed or incomplete information.
Regularly checking your credit report helps identify errors that may be affecting your score. Dispute inaccuracies, such as incorrect personal information, incorrect account details, or duplicate accounts, through any credit bureau.
How to raise a dispute in CIBIL?
Visit the credit bureau's official website and follow the prescribed procedure for raising grievances.
Reduce outstanding debt
To know how to better CIBIL score, reduce outstanding debt, prioritise high-interest loans first and make consistent payments. Consider debt consolidation for easier management. Create a budget to track expenses. Staying disciplined with repayments is the way forward in your journey to know how to improve CIBIL rating.
How long does it take to improve your CIBIL score?
Do you want to know how to enhance CIBIL score? It takes between 4 and 12 months to see a significant credit score improvement, depending on your current score and credit history. However, lenders report your credit behaviour to credit bureaus every month. So, if there is a repayment default, it will be reflected in your report almost immediately.
Moreover, some defaults, such as defaulted loan repayment, settlement, or closing off a loan at a reduced amount, can stay in the credit report for years, affecting your CIBIL score. So, it is recommended to avoid these instances as they might hamper your score.
Knowing how to improve CIBIL score quickly involves addressing multiple factors simultaneously. While wondering how to increase CIBIL score immediately isn't realistic, implementing all the strategies mentioned can accelerate the process.
Conclusion
The question - How do I improve my CIBIL score - is not hard to answer.
The answer is - discipline, patience, and strategic financial planning.
Make timely bill payments, maintain low credit utilisation, avoid unnecessary credit applications, regularly monitor your credit report, and reduce outstanding debt. If you are thinking, how to improve CIBIL score immediately, understand that it is not possible; consistent effort yields results over time.
You can also avail of secured Credit Cards to rebuild your credit history. Axis Bank's Credit Cards are tailored to different needs. You can choose from premium, cashback, and lifestyle Credit Cards with exclusive benefits.
Also Read: CIBIL Rating: What Is CIBIL Score, Meaning & Full Form
FAQs
How often does my CIBIL score change?
Your CIBIL score typically updates every 30 to 45 days. If you are wondering - How do I increase my CIBIL score, the answer is regular monitoring to track changes and adjusting your strategies.
How can I check my CIBIL score for free?
You can check your CIBIL score for free once a year through the official CIBIL website. Additionally, many financial institutions offer free CIBIL score checks for their customers.
Can closing old Credit Cards negatively impact my CIBIL score?
Yes, closing old credit cards can negatively impact your score as it reduces your credit card usage history and increases the overall credit utilisation ratio.
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.
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