Best Ways to Improve your Low CIBIL Score

Why people are after securing a high CIBIL score! This is mainly to get faster loan approvals. A low CIBIL score is a disadvantage for borrowers who often face financial shortages and rely on personal loans for financial management. If the CIBIL Score is low, some lenders may not even consider the loan application further. A low CIBIL directly shuts the door of getting a potential loan in times of financial emergency.

What is a CIBIL Score?

A CIBIL Score is a 3-digit numeric developed by the Credit Bureau of India to collect and maintain financial records of individuals. So, whether it is applying for a new credit card or a personal loan, lenders mandatorily verify the CIBIl score.

You can check your CIBIL score on their website, a credit information site of TransUnion CIBIL Limited. If you check your credit score at intervals, you will notice a difference between the two scores on different platforms, as one of the credit scores may be outdated. This is a sign that you have a low CIBIL score that is of no use to borrow credits/loans online. Immediately, work towards improving the credit score to increase your chances of instant loan approval. A higher credit score is one of the eligibility criteria on instant personal loan apps.

Also Read: Can you Get a Personal Loan with Low Cibil Score? Know Everything 

Hence, follow the best ways to improve your low CIBIL score

Pay Dues on Time

An EMI date is predefined, so you already know the repayment date. However, if you still miss the EMI or pay late, it affects the CIBIL score negatively.

Maintain a Healthy Credit Balance

Managing multiple unsecured loans at one time can affect the CIBIL score, bringing it down. Instead, maintain a balance of secured and unsecured loans such as home loans and personal loans.

Control Credit Habits

If possible, curb your habit of excessively relying on credible sources. Apply for new loans in moderation.

Prioritize Old Debt

Repay your old debts before applying for new loans. The interest and number of loans will keep piling up that will directly affect the credit score.

Check Credit Score at Intervals

Annually, it is a good habit to review your credit score to avoid discrepancies, if any. 

Avoid Joint Accounts

Any default behaviour by your joint account holder can directly affect your CIBIL score. Holding individual accounts is always better than partner accounts.

Go for a Longer Loan Tenure

Choosing a longer loan tenure of more than 6 months, reduces the EMI amount and makes the repayment easier. This maintains the regularity of EMI payments every month and keeps the credit score high.

There’s no specific period for how long it will take to improve the CIBIL score, it depends upon the consistency of managing the credits well and paying dues on time. Financial institutions are inclined towards borrowers holding a stable CIBIL score and the loan approval process has no hurdles with a high credit score.