5 tips to improve your CIBIL Score
In this digital era that we are living right now, a good CIBIL score is much needed when it comes to obtaining a loan. It is mainly a reflection of your current financial condition. Financial crises can arise at any time and feel the need for money to meet various needs.
Your credit score mainly tells your lender at a glance how responsible you are with your credit score. The better the CIBIL score, the higher the chances of getting your loan approved. Therefore, it is mandatory to maintain your CIBIL score so that you can take it whenever it is needed.
Everyone nowadays is trying to secure their finances from a variety of sources for reasons like starting a business, managing a home, or paying bills to the hospital via loans. Hence, you must need tips to improve CIBIL score to increase the chances of getting your loan approved.
You must know how you can improve your CIBIL score and get a loan at the lowest interest rate. However, this blog will let you know how you can effectively increase your credit score by following some tips.
About CIBIL Score
Before knowing how you can improve your credit score, you must know what is CIBIL score first. CIBIL score is the score that mainly delineates your credit history and it depends on many factors like the number of your unsecured loans, your repayment history, and your unverified history among others.
CIBIL scores mainly can range from 300 to 900. If you have a CIBIL score between 300 to 549, it is considered to be poor credit. But, if your score is between 550 to 700, then you are having a normal average CIBIL score. So, the ideal CIBIL score is 750 to get your loan approved.
If you are in the dire need of a personal loan, then you must have a CIBIL score above 700. Though you can not change your CIBIL score overnight. You need to do some minor and major modifications to make a significant difference in your score. If you find several platforms where you can get some tips on how you can increase your CIBIL score with the proper strategy.
Importance of the Good CIBIL Score
Your credit score lets your lender know if you are worthy enough to take a loan. So, having a good credit score makes you worthy enough to increase the possibilities of getting your loan approved.
To get a better interest rate on your loans and credit cards, the value of CIBIL score matters the most. If you do have a great CIBIL score, you might get a higher interest rate on your loans.
Higher Limit Loan Approval
A good CIBIL score will be very helpful if you are thinking to get a high amount of loan. A good score can make you a low-risk borrower, it means financial institutions or banks will easily trust you and approve your high amount of loan.
5 Effective Strategies to Improve Your CIBIL Score
Now that we have realized the importance of CIBIL score, it is time to know how we can improve the score effectively. So, below are a few tips on how you can up your CIBIL score as soon as possible to get your loan approved.
1. Spot the Inaccuracy by Checking Your Score Daily
If you are confident enough that you have paid all your loans and bills on time by maintaining excellent credit behavior, still having a low credit score can be irritating. Closely look at your score history to know where did you go wrong.
Therefore, it is mandatory to check your credit reports daily to spot any errors and inconsistencies. It is an effective way to improve CIBIL score. The online marketplaces now have simplified the entire process of monitoring credit history.
Some of the reasons behind the poor credit score include delays in updating your important information, putting incorrect information, etc. So, if you find this type of inaccuracy, make sure to rectify it immediately to improve your score.
2. Make Your Payments On Time
One of the major reasons behind having a poor credit score is the delayed payment of credit card bills. Therefore, it will always be better if you pay your bills on time to avoid an increased interest rate.
If you tend to forget to repay your bills before the due date, make sure to set a reminder. However, automated systems are beneficial which automatically deducted EMIs direct from your bank account every month. If you want to know some effective tips on how you can remember your credit bills’ due date, consider visiting Spare8 or downloading the app to increase your CIBIL score.
3. Do Not Exceed Your Credit Limit
Sometimes people reach the maximum limit of their credit card usage which can affect your CIBIL score. So, it is very crucial to check your credit limit to avoid a negative impact on your credit score. If you think your credit card spending is high, it will be best to customize the limit in sync with your forecasted spending.
4. Avoid Taking Multiple Loans
Searching for so many credit cards and loans in a short period does not paint a favorable image. Every time you are applying for a new credit line, your application will eventually lead you to hard inquiry and this can hurt your CIBIL score pretty much.
Therefore, taking one loan at a time is one of the tips to improve CIBIL score by paying it regularly. However, you can download the Spare8 app to make a good credit score profile with effective strategies.
5. Choose Longer Tenure
Choosing a longer tenure will be a helpful way to improve CIBIL score since it makes it easier for you to repay. Having credit cards and loans does not negatively affect your credit card score, but choosing a short tenure will hurt your credit score if you don’t repay on time. So, pay your EMIs comfortably to get loans easily to meet your financial needs.
Financial crunches are very natural and it is not a bad thing to take loans from financial institutions. But maintaining a good CIBIL score is important to get the approval of loans immediately.
Remember, you won’t see any significant change in your CIBIL score right after you follow the aforementioned tips to improve CIBIL score. It takes at least 6 months to see a change in your CIBIL score.
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