Pointers to Help Improve CIBIL Scores Quickly

CIBIL is the credit bureau that provides a report to the banks and financial institutions on your request about your financial well-being. This is prepared based on your credit scores. This report is the foundation on which banks decide about your ability to pay back loans. The credit scores help banks identify clients as creditworthy or not.

How risky or otherwise to lend to a particular customer is dependent on the scores. Banks do not prefer lending to high-risk customers. Banks also decide on the interest rates based on the score range the client falls. The scores are given in the range of 300-900. If your score ranges from 750-900, then you have the best CIBIL scores and will surely get your loan approved. Anything lesser should be improved so that there is no hesitancy from the banks towards your loan. Check MyCIBIL to know your scores.

To be loan-ready, your credit score report must project a favourable picture of your finances. If you are keen to know the factors affecting your scores and the tips to be followed to gain the best CIBIL scores, read along.

What are the Ways to Develop the Best CIBIL Score?

Make your Credit Card Balance Zero

One smart tip to increase the CIBIL score quickly is to make your credit card balances nil. Spend only that amount which you can repay when it becomes due. Keeping overdue amounts and postponing payments can do no help to build a best  CIBIL score.

If you have any balance amount to be paid and you are not able to pay, request for more time or the next time request for more credit limits. This you should do before you apply for the scores as these are the ones that help to reflect positively on your credit scores. It is always better to keep a limited number of credits. Do not keep many cards and accumulate more in each. Repayments will cause a concern later.

Maintain Clean Payment History

Your credit payment history is the list of all your past and present payments to banks and other lenders from whom you borrowed. It also lists out your timely, delayed, and defaulted payments. Every month this data is sent to the rating bureaus from the lenders about your payments. CIBIL collates all these data and, on your request, provides them in the form of a report. They take into account your late payments and how often do you repeat them, etc., into the CIBIL score calculation process.

So your payment history does impact your credit score. It would help if you keep your sheets clean so that there is no negative impact on your loan request. Any negatives should be cleared before you approach a lender.

Check Your Credit Report and Dispute Discrepancies

The best CIBIL scores are achieved by checking your CIBIL report regularly. You are not always aware of where your financial health stands unless you check your report frequently. This is very much essential as you will know exactly what makes a negative impact on your score.

For example, you should know which of your loans or cards are pending payment and are likely to affect your best CIBIL scores. Only when you come to know about the components of your report earlier will you know what is required to be done to fix the negatives present in it. If any information projected is not in accordance with your records, you can request it to be changed through CIBIL and your bank so that it does not affect your loan eligibility. Any dispute will be resolved within 30 days from the receipt of the request. When the errors are corrected, it will automatically improve your scores and help you to get credit. You can check the report by clicking on the check ‘MyCIBIL’ report option on the official website.

What is the Procedure to Get a Free Credit Report?

There is a simple process you should follow to get your Check ‘MyCIBIL’ report  for free. This is a one-time option, and if you want reports to be sent to you periodically, like 6 months or one year, you can opt for paid subscription plans on the website. Once you download the free report for a year, it is not available again for the same year. You can get a free report after your subscription is over.

• First, create an account on the CIBIL website. The official website to get your free CIBIL report is https://www.cibil.com
• To log in, you need to set a new username and password that will be your future log-in information. Create a new account if you are a first-time user. Keep the information safe for access when required.
• Enter all personal details like name, date of birth, PAN, address, and email Id. Ensure that the details match your Govt. id. 
• Verify your identity through OTP authentication. You should keep ready all loan account data from various accounts that will help in faster authentication.
• In the next step, you can view your free best CIBIL score. This report can be downloaded for your use.

You will be able to get one free credit report annually. However, if you need another report after a few months, you may pay a nominal fee to get the same with unlimited access. 

What are the Components of a Credit Report?

1. All your personal details like name, gender, date of birth, PAN, email id.
2. Your CIBIL score, which is a 3-digit number that has been calculated based on your credit activities, also forms part of your report. 
3. Your contact information, which is the address and mobile numbers, are available in the CIBIL report.
4. The account information is another important part of your report. This contains details of all your loans like personal, auto, credit cards, etc. In addition, the loan amount, payment due, payment history, and monthly payment behaviour are all listed under this heading. 
5. The inquiry information with details of each inquiry made previously regarding the report, and when and by whom was it applied.

How to Make Sure to Pay Your EMIs on Time?

There may be various purchases made for which the payments will be through EMI. Payment of EMI should be on time, and there should not be any defaults. Though it is best to avoid delays, it may be acceptable to do so in rare circumstances. All these delayed payments and the number of days it has been delayed will form part of the report and will pull down the credit score. So the best practice would be to pay the dues on time. All lenders are interested to know if you can pay the dues on time. This is the major criteria that will affect your loan eligibility.

Keep Reminders

To make sure you don’t forget the dues, keep reminders set and make payments on the appointed date. This will eliminate the trouble of remembering all dates. This will make the process of EMI payment easier and thus save you from negative scores.

Post-Dated Cheques

You can also give your lenders or others to whom payment is due post-dated cheques. This can also help avoid the trouble of keeping track of dates. But an important thing here is to make funds available when cheques become payable. Else, with cheque bounces, it will be even more difficult to get a good score.

Auto Debit

A standing instruction to the bank to allow the creditor to debit your account every month for your EMI amount will also help you not miss payments. Here too, keep funds readily available so that they can be paid to the creditor’s account when due.

All these steps make sure that you pay EMI on time.

How to Limit Your Credit Utilization?

Everyone does credit utilization as huge payments cannot be made in a single go. But for that matter, repeated use of credit will give an opinion that you are excessively dependent on credit only. Remember, it is equally essential to repay them too. With so many debts at your disposal, lenders will need assurance that you can repay them on time. Do not use your credit cards till you use up all credit limits. It is advisable to keep your credit card usage below 30% of your admissible limit. This holds good for individual cards and overall also. Regularly check Mycibil scores to reduce your credit utilization ratio. Lower the ratio, the higher the scores.

Why Should I Increase My Credit Limit?

Increasing your credit limits can help you lower the credit utilization ratio and thus quickly increase your scores. Lenders should not think you are a high-risk borrower. If they get that opinion about you, getting loans becomes very difficult. If you do not increase the limits, then your spending would indicate heavy utilization of all available credit. Though credit is available, you cannot utilize it to the fullest as it may be difficult at the time of repayment. And when you have more than one creditor to repay, it puts your financial position in jeopardy. Therefore, increasing the limits can give you a cushion and create a better image thereby creating the best CIBIL scores.  

More than improving your scores, maintaining them in the same bracket is very much essential. Only that can prove your consistency. If you want to highlight your positive credit health, you should always follow prudent practices and take corrective action. Make sure you do this before you apply for a loan.

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