TransUnion CIBIL Limited is one of the four credit bureaus operating in India which are authorized to provide a credit score. A CIBIL Score ranges between 300 to 900 and a score below 500 is considered poor whereas a score above 700 is considered fine. CIBIL Score is a measure of your creditworthiness and is based on a number of parameters such as payment history, credit utilization, credit card dues and length of credit history. Having a low CIBIL Score can significantly reduce your chances of getting your personal loan or secured loan approved by a bank and hence, it is financially prudent to strive for a CIBIL score that is above 700. It is difficult to magically improve your CIBIL score overnight. However, you can go through the following steps to know how to improve CIBIL score immediately:
1.Check your CIBIL Report:You need to keep checking your CIBIL Report regularly and carefully scan the details on your credit report. Often, customers have reported errors and inconsistencies in their CIBIL Report. Such errors on your credit report are not an uncommon occurrence and you need to immediately report the incorrect or delayed information to CIBIL so that there is no adverse impact on your credit score. Errors on credit report mean a considerable decline in CIBIL Score and hence, filing a dispute with CIBIL in case of error, is a way of immediately Improve Your CIBIL Score.
2.Ensure Timely Repayment:Not paying your credit card dues on time can significantly reduce your CIBIL score. A single delay in repayment of debt can lead to a decrease in your credit score. You need to make sure that you are paying your credit card bills and EMIs on time. If needed, you can set reminders to repay your bills and EMIs to ensure more discipline in your payment schedule. Disciplined repayment of debt has a positive impact on your personal loan eligibility as well.
3.Restrict Credit Utilization:You need to make sure that you do not spend more than 50% of your credit limit. Spending the entire credit limit will show that you lack the discipline required in financial planning. It is preferable to limit your credit card bill to 30% of the full credit limit. However, not using your credit card at all will also have a negative impact on your credit score. Thus, balancing out your credit card expenditure is an immediate way to improve your CIBIL score.
4.Avoid Multiple Credit Card Applications in a short span of time: Do not make too many credit applications within a short span of time as it leaves a poor reflection on lenders and banks. If you apply for a credit card or personal loan multiple times without any reasonable time gap between the applications, lenders will get the impression that you are credit hungry and chasing credit without any prudent planning. Applying for several credit cards at once reduces your credit score. So steering clear of this tendency to apply for credit multiple times all at once, will help you improve your CIBIL score.
5.Avail a mix of different types of credit:If you do not borrow any credit at all, you will not have a credit history and this will reflect poorly on your credit report. Hence, to have a healthy credit history, you need to avail a variety of credit ranging from personal loan to secured loan, long term loans to short term loans and so on. Having a healthy credit history will enhance your personal loan eligibility and make it easier for you to get a high loan at a lower interest rate. Your credit history is an important determinant of your CIBIL Score and therefore, you need to borrow a mix of different kinds of credit.
The above steps are a guide to how to improve CIBIL score immediately. Through patience, commitment and discipline, you can achieve a good CIBIL Score to support your application for a personal loan or a secured loan.