TransUnion CIBIL, a credit bureau, generates a three-digit credit number based on your credit history. This score might range from 300 to 900. The better your credit score, the easier it will be to obtain loans from lenders. If you have a credit history and have not yet applied for a credit card or loan, you should be aware of your CIBIL score.
A numerical representation determined by the financial institutions to understand the creditworthiness of an individual is known as a CIBIL score. This numerical score determines the borrower’s past transactions on credit and the rate of repayment of loans with or without lapses. A CIBIL score ranges from 300-900. Thus, a CIBIL score of 750 can be considered excellent. To reach the goal of 750, all you need to do is pay your credit card dues, on-time every month without the chance of defaulting payments.
A good CIBIL score can help you get reasonable interest rates on personal and home loans, it also enables you to get premium reward points. An essential factor in building a CIBIL score is whether you are repaying your installments in time and maintaining your CIBIL score. Along with that, a timely cibil check plays a crucial role.
Below are a few points you should consider which will help in maintaining and improving your CIBIL score-
Always ensure to pay monthly credit card debts in time, remember that one 30-day late payment fee could bring your CIBIL score a 100 points below. Maintaining a timely payment will ensure an excellent CIBIL score. Try setting up online auto payments and reminders for due dates, as even a single miss in payment can comparatively lower your score.
Restricted use of credit limit
It is always best not to exceed more than 25%-30% of the limit of a credit card. Dropping the credit utilization to 20-30% can have significant positive changes in your CIBIL score. Always make an effort to pay more than the monthly minimum for credit card balances.
Extra borrowing accounts
Having a car loan, personal loan, or a student loan and repaying these debts monthly, along with the credit card installments will also help boost your CIBIL score. By paying multiple debt installments, your CIBIL score will increase significantly. Be careful with extra debts as a maximum number of individuals are not capable of repaying loans in time, and hence this impacts their CIBIL scores.
Keeping old credit cards will also help benefit your CIBIL scores as credit history matters. The credit history is an essential part of determining the CIBIL score as this gives the lenders a sense of stability for their loan amount. Never close an old credit card and start using a new one, but instead use both the credit cards once a month. Keep old cards open after paying them off, and this will help increase your credit limit and also boost your CIBIL score. Long-term credit history always generally helps boost the CIBIL score even if there are inconsistencies in repayments.
Monitor your CIBIL scores regularly
Your journey to a great CIBIL score could always be at risk when it comes to factors such as identity theft and reporting errors. If any irregularities arise, you should get in touch with credit bureaus and report them.
Limit applying for new credit cards
Whenever you request the best credit cards in India, the inquiry is recorded on your credit report. Having several applications in a short period will make lenders question your repayment capabilities. These inquiries stay on your credit report for almost two years and can have disastrous effects in lowering your CIBIL scores.
The above tips are to help you gain the required CIBIL score as these methods help increase the CIBIL score significantly. If you are low on your CIBIL score, these methods will eventually help you improve your score over a while.