Last updated on April 15th, 2022 at 08:16 am
Your creditworthiness is excellent if you have a good CIBIL or credit score. A good CIBIL Score makes it easier to secure a credit card or a loan swiftly. You can also negotiate for the best interest rate and fees, a flexible repayment schedule, a desired loan amount and credit limit, better terms and conditions, and other advantages.
While we consider a credit score of 750 or higher to be good, any figure below that is considered bad.
If you want to apply for a personal loan or a credit card, you’ll need to check the credit score. Your credit score is determined by several factors and other variables.
In this article, we’ll go over some of the elements that influence your CIBIL score and how to improve it.
A Balanced Credit Portfolio
If you choose a credit card or a loan prudently, your CIBIL score will undoubtedly improve. Those that rely too much on unsecured loans, on the other hand, may find themselves in a difficult situation. As a result, a healthy credit mix of unsecured and secured loans, as well as short-term and long-term loans, is recommended. In order to achieve the optimum outcomes, EMI repayments must be made on time. This will demonstrate that you are a trustworthy borrower.
Look for mistakes on your credit report.
CIBIL Report errors or discrepancies may have a negative impact on your credit score. Incorrect information, a delay in updating repayment information, and so on are examples of errors.
Overuse Of Credit Available: Using up your entire credit limit on a frequent basis is considered a red sign. It means you live completely on credit and, more than likely, spend more than you make, which could lower your CIBIL score.
Avoid Impulse Spending:
It’s an age-old adage to think carefully before splurging. Don’t just use your credit card to purchase the newest amazing product on the market. Take your time to consider your options and make a budget.
Instead of a personal loan, consider a gold loan.
When you need money quickly, getting a gold loan rather than a personal loan will help you preserve a positive CIBIL score. It is, without a question, one of the best ways to improve your credit score. The primary distinction between a gold loan and a personal loan is that the former is a secured loan, whereas the latter is an unsecured loan. The lender has guarantee over the money because the gold loan is given against gold pledged at the NBFC or bank.
Avoid filling out many loan/credit card applications in a short period of time!
Too many loan and credit card inquiries in a short period of time does not make a positive impression. It demonstrates that you are credit-hungry and seeking credit from a variety of sources. So, if you don’t want your credit score to plummet, stop applying for many credit cards and loans in a short period of time. Furthermore, certain lenders may take advantage of your condition and try to entice you into taking out high-interest loans.
Make good use of your credit cards!
Everyone can benefit from credit cards. It has numerous advantages, including sufficient credit for our needs, reward points, free vouchers, and the peace of mind of not having to carry cash.
However, you should use your credit card only when absolutely necessary to avoid problems with spending discipline.
While it is critical to raise your credit score, keep in mind that it is a gradual process. On average, it would take a year’s worth of effort to see effects in your credit report. Check our free credit scores regularly to keep a close eye. Maintaining a positive credit history and CIBIL score can assist alleviate financial concerns and is well worth your time and effort.