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Tips to improve your credit score: To fulfil your needs amid inflation, you need a loan or credit card for some reason or the other. However, whether you need a personal loan or a car loan or a home loan or a credit card… a good CIBIL score is necessary to avail all these facilities.
The higher the CIBIL score, the better your financial position. However, many times we make mistakes, due to which the CIBIL score (credit score) gets spoiled, or reduced. In such a situation, it becomes difficult to get a loan. Here we have brought you some reasons for poor CIBIL score and easy tips to improve it. With the help of which you can easily improve your credit score and avail financial facilities.
Simple understanding of CIBIL score
CIBIL score is a rank, usually 300-900 points, which gives an idea of your financial strength. Which is updated according to your 24-month credit history. In which a score of 550 to 700 points is considered good. But a score of 700-900 points is excellent. In which if your CIBIL score is 750 or more, then it becomes easier for you to get a loan or credit card.
Because of this the CIBIL score gets spoiled
If you take a loan and don’t repay it on time, your credit score can go down.
If you do not pay your credit card bill on time, your credit score will get affected.
Not maintaining minimum balance in your bank account can also harm your credit score.
Your CIBIL score goes down when you apply for many new loans in a short period of time.
How to improve your credit score
1. Paying the loan on time: If you want to improve your CIBIL score, pay your credit card bills, loans and all other debts on time, any delay can affect your score. Pay EMIs and credit card bills on time.
2. Reduce credit card usage: You are given a credit utilization rate compared to the total credit limit available to you by your bank. But reduce your credit card utilization limit by 30 percent. For example, your credit card limit is Rs. 10 thousand out of which do not spend more than Rs. 3000.
3. Do not close old credit cards: CIBIL score is decided on the basis of your credit history. So if you have an old credit history then the CIBIL score will be better. So if you have an old credit card account and you are not using it, do not close it.
4. Apply for a new loan wisely: Applying for loans repeatedly affects your credit report. This reduces your CIBIL score. So do not apply for loans repeatedly.
