A new year is upon us again and it is time for us seize an opportunity to make positive start to the new year with new resolutions! This year, along with the resolutions you may have already made on the personal and professional front how about making a resolution to increase CIBIL score? Your CIBIL score is a three digit numeric (in the range of 300-900) deduced by CIBIL, the premiere credit bureau of the nation on the basis of your credit history. Your CIBIL score determines your creditworthiness and may just decide your fate when you apply for any fresh credit.
Why is it necessary to improve CIBIL score?
The closer you are to 900 the higher your chances of procuring a new line of credit when you need it the most. The Reserve Bank Of India (RBI), the banking regulator of India, has made it mandatory for all banks to check out the CIBIL score of an individual as a part of the credit assessment process. This means every time you apply for a new loan or a credit card, the lender in question accesses your CIBIL score to assess whether or not you are worthy enough to be given a loan.
Only if your CIBIL score is 750 and above, is your loan application likely to get sanctioned. You even stand the chance of your loan application getting rejected if your CIBIL score is way below the satisfactory level. So if you are somewhere on the borderline, or your CIBIL score is well below 750, it is good enough reason for you to make a new year resolution to improve your CIBIL score. If you are not very sure about what needs to be done to enhance credit score, here is a ready reckoner for you that will answer your queries on how to increase CIBIL points.
Rectify or improve payment patterns
This is the first thing you need to do in order to increase CIBIL score. Check if you are making timely repayments on all your existing debt. The first thing to be mindful of are your credit cards. Check if you are carrying too much of outstanding balance on your credit cards. If that is the case, try and reduce that burden immediately by paying off as much of credit card debt as you can. Once you have managed to cleared all your credit card dues, instill a payment mechanism and a discipline in yourself that help you pay off the entire outstanding balance on your credit card well within the billing cycle. Once you have mastered this habit, its half your job done to keep your CIBIL score high.
Check out the mix of credit in your debt portfolio
One of the things that impact your CIBIL score is the mix of the credit you have availed of. If you have too much of unsecured debt like personal loans or credit cards in your debt portfolio, you will need to discharge these as soon as possible. Secured loans on the other hand impact your CIBIL score positively as long as you are making timely repayments. Ideally you should have a couple of secured loans and a credit card or two in your debt portfolio and service your credit in a timely manner to enhance credit score.
Keep an eye on credit utilisation
Credit utilisation is another factor that will impact your CIBIL score negatively, if you do not keep a check over it. The amount of credit you have used as against the total line of credit made available to you is called credit utilisation. At any given time, your credit utilisation should not exceed 30-40% of your total credit limit. Ideally you should try and keep it under 30%. Your credit utilisation can shoot up due to reckless credit card usage. You need to be very careful with your credit card spend hence. As a thumb rule, never purchase anything on your credit card that you think you cannot repay within the billing cycle of the month. Following this maxim, will keep your credit card usage under check.
Apply for credit only when you need it
It is a fact that credit is quite easily available today and you may be regularly receiving calls even from lenders who are pursuing you to take a loan or a credit card on the basis of “an attractive offer”. Taking on a personal loan or a credit card may seem simple enough but that will have a detrimental impact on your CIBIL score, firstly because they are categorized under unsecured credit and secondly because applying for too many of such credit lines will make you seem credit hungry to a prospective lender. Therefore apply for a loan or a credit card, only when you are in real need of it and not just for the sale of it.
Keep an eye on your CIBIL score and report
Even when you make continual efforts to improve your CIBIL score, do not forget to keep a periodic vigil on your CIBIL score and report. It is necessary to pull out your CIBIL report at least twice a year to ensure that there are no discrepancies in it. In case a discrepancy or an error such as a wrong entry by a lender creeps into your CIBIL report, for no fault of yours, it will not come to light unless and until you access your CIBIL report and rectify the error by raising a dispute. If you fail to access your CIBIL report periodically errors of these kinds will keep bringing your CIBIL score down. As a result, you may lose out on a chance to access timely credit on your own terms.
Thus as you can see, it is of utmost importance in today’s time to maintain a high CIBIL score. If you have not made enough efforts to increase your credit score in the past, it’s never too late to begin. So make a resolution to enhance your CIBIL score and stride in confidence when you have managed to do so.
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Good evening Mr Singh,
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i want to know my cibil score
what r the loans not cleared by me .i want to know
Dear Mr Kanukuntla,
We would be happy to help you in analyzing your report and helping you to resolve it. Request you to share your email id and mobile number so that we can arrange a call from us within 48 working hours.
my cibil reflected for two account setteld please advice can setteld remarks upgrade and good cibil score&credi score increge please help and suggestion
Settlement is a negative flag so definitely the score will get impacted. You need to remove these remarks as its impacting your credibility. Settlement simply means that you are incapable of making payment on your loan and impacts your loan eligibility.
Request you to share your contact details so that we can arrange a call and help you to understand your report.
Team – Customer Delight
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