Planning to take a loan or credit card?
Check CIBIL score right away!
There’s a chance of higher interest on loan or rejection of credit card if you have a poor credit score.
A good credit score is a must.
But, what is a good CIBIL score?
A credit score is a number assigned to an individual based on an analysis of his credit history. Your credit score will decide if you are worthy of borrowing a loan. A good credit score shows that an individual pays off his debts on time, thus increasing his chances of availing future loans faster and with lower interest. A credit score is a number between 300 to 900 and any number more than 700 is considered to be a good CIBIL score.
However, below 700 means getting a loan is a tough nut to crack.
The good news is that it is possible to improve your CIBIL score. So, stop worrying and put your best foot forward towards improving your CIBIL score.
Breeze through some of the best tips to improve your CIBIL score immediately:
1. Analyse your credit report and resolve the errors, if any!
You might think that your credit score is good. However, you must check your CIBIL score online using a CIBIL calculator. In case you have a bad score, it can be due to an administrative error. You might have paid off the loan and it might still show pending EMIs. Also, check for any suspicious activity; it could be fraud. Such errors or activities might affect your future borrowing power. If you find such errors, report it to CIBIL and resolve the dispute immediately. The revised score might be positive. [Check your CIBIL score on our Credit calculator]
2. Pay on time, every time!
While some people pay their bills late, some skip the payment completely. However, even a single late payment affects adversely on the credit score. So, it is always a good practice to make all the payment before the due date. Making payment at least five days before the due date and if paying by cheque, then 10 days before the due date will take your CIBIL score to the green zone.
3. Use your credit cards wisely!
Credit cards are a great tool for everyone. It comes with so many benefits; it provides enough credit for our necessities, reward points, free vouchers, and the peace of mind to roam without cash. However, you should limit the use of your credit card so as to avoid any issues with spending discipline. Some ask to follow the 30 percent credit utilisation rule, while some advise spending 50 percent of your limit. Let us go ahead with 40 percent to be on the safe side. Optimised use of credit card will facilitate you to get a good CIBIL score.
4. Avoid multiple loan/credit card applications in a short span!
Too many enquiries for loans and credit card in a short span don’t create a good impression. It shows that you are credit hungry and looking for credit from multiple sources. So, if you do not want a steep drop in your score, then you must stop applying for multiple credit cards and loans in a short span. Moreover, some lenders can also take an advantage of your situation and lure you in high-interest rate loans.
- Bonus Tips:Avail the right mix of secured and unsecured loans.
- Pay off loans with higher interest rates first.
- Don’t settle loans with credit card.
- Use the oldest credit card.
- Get your first credit card smartly.
- Increase your credit limit.