How To Increase CIBIL Score: Smart Tips to Improve Your Creditworthiness!

When applying for a loan or credit, it is essential that you have a good CIBIL score. This is because a good CIBIL score is not just a three-digit number; it is an indication of good financial health and creditworthiness. However, improving your credit score and then maintaining it seems challenging, especially if you have had a financial setback recently. Don’t worry! In this article, we will discuss how to increase CIBIL score. We will also have a look at the CIBIL score ranges and the importance of maintaining an impressive score. 

So, keep reading to explore the most trustworthy ways to boost your CIBIL score!

Credit Score Range: What Category Does Your CIBIL Score Fall Into?

Check the table below to discover where your score falls within the CIBIL score range and what score you should aim for: 

If your score is in the bad, poor, or average category, it is time for you to start exploring how to increase CIBIL score from 600 to 750.. But first, let’s understand the benefits associated with maintaining a high credit score. 

Exploring the Noteworthy Benefits of Having an Excellent CIBIL Score 

When you maintain your credit score above 750, you can reap the following benefits: 

• A good CIBIL score is an indication of your creditworthiness, which means a lender will see you as a responsible borrower. This improves your chances of getting a loan or credit card approval. 

• You can also get loans at lower interest rates if you have a good credit score. 

• Many companies will be eager to give you a pre-approved loan offer. 

• You will also be able to access premium facilities.

• Oftentimes, a bigger loan amount is approved because of a high CIBIL score. 

• Lastly, you get an extended time for paying back the loan. What does this mean? That your EMIs are smaller, which facilitates easier financial management and convenient repayment. 

How To Improve CIBIL Score: The Most Effective Tips

Now that you are aware that boosting your CIBIL score can open doors to better financial opportunities, you must be wondering how to improve CIBIL score immediately. While instant improvement is impossible, consistent efforts will definitely work for you. Here are some tips to follow: 

Ensure Timely EMI Payments 

Probably the most straightforward answer to this question – “How to increase my CIBIL score” – is that you should pay your EMIs on time. Remember to set a reminder on or before the due date of your EMI. That way, you will be able to avoid a fall in your credit score. 

Another good thing about timely EMI payments is that you won’t have to pay any penalties. A good way to do this is to add Standing Instructions to your bank account. After a short procedure is done, the specified funds will be deducted every month on the date you have set. 

Pay Credit Card Bills Before Due Date 

If you don’t pay your credit card bills before the due date, it is highly likely that your CIBIL score will fall drastically low. Make a strategic plan that allows you to clear your bill on time. 

Suppose the repayment due date is by the end of the month, and you are unsure if you will have enough funds in your account then. In that case, set the specific amount aside (preferably in a separate bank account) as soon as your salary is credited. 

Remember, if you miss the due date, the provider will report the same to the bureau, and it will be reflected under the DPD (Days Past Due) segment of your credit report. In case a complete payment is not possible, you must definitely pay the minimum amount due to avoid non-payment reporting. 

Don’t Request Loans or Credit Cards Very Frequently

Again, if you are wondering how to improve CIBIL score quickly, you need to keep a watch on how frequently you apply for loans or credit cards. If you simply check your CIBIL score to know your creditworthiness, a soft inquiry is generated. This doesn’t impact your CIBIL score at all. 

On the contrary, when you apply for credit cards or loans, the banks or lenders will be interested in assessing your CIBIL information. When they request it from the credit bureau, it is considered a hard inquiry. If this is conducted occasionally, it will not reduce your CIBIL score. However, if multiple hard inquiries occur on your account in a very short tenure, it reflects on your greed for credit. 

In such situations, your CIBIL score will be lowered by the credit bureau. Hence, before applying for a new credit card or a loan, thoroughly research your options. Once you are sure of what you want, you can apply only to one provider. 

Maintain a Mix of Credits 

There are many ways that act as a solution to how to increase your CIBIL score. Among these, an effective one is to maintain diversity in the credit you borrow. Your credit profile should have a mix of credit cards from different companies. 

You should also issue a combination of loans, that is, secured and unsecured loans. Secured loans are ones that require you to decide on collateral and include borrowing a large sum of money. Some examples of secured loans are home mortgages and car loans. On the contrary, unsecured loans are based totally on your creditworthiness and assets. Unsecured loans include personal loans, credit cards, student loans, etc. 

Your credit mixture has a 10% part in your total CIBIL score. Hence, having just one loan or credit card is not going to boost your credit score in any manner. 

Don’t Delete or Close Old Credit Card Accounts 

Apart from the credit mix, there are many other aspects that influence your CIBIL score significantly, such as the length of your credit history. With a 15% stake in the total score, your credit history is proof that you have been associated with a lending organization for a long tenure and have been paying all the dues in a strictly disciplined manner. 

Hence, if you are wondering how can I improve my CIBIL score, remember not to close your oldest credit cards or delete such accounts. Even if you don’t need or use them anymore, keep them in the mix so that you are able to win the trust of banks as an applicant. 

Furthermore, many lenders tend to inspect or analyze your credit application thoroughly. When they do, an account with a long tenure on your profile will surely benefit you. 

Set a Limit of Your Credit Usage

Another good piece of advice for people who ask how to increase CIBIL score is to keep an eye on their credit utilization ratio. This is defined as the percentage of the total available credit that you use in a month. Maintaining this number below 30% is the ideal thing to do for credit account holders. 

What happens if you use your available credit excessively? It is a sign that you are credit-hungry and are over-dependent on credit or loans for your financial management. This impacts 30% of your total CIBIL score, which means it will drastically fall below the “good” range if you don’t use credit smartly and within limits. 

Remember, loans and credits can facilitate a huge purchase so that you can pay for it in parts in the upcoming months. However, in the absence of strategic monetary management, you may be pushed to the edge of debt. So, be mindful and set a limit on the amount of credit you use. 

Look Out for Errors and Rectify Them 

Often, numerous unknown anomalies arise in your credit history or account, which are known to significantly impact your CIBIL score. Hence, if you ask any expert how to improve CIBIL score, their recommendation will be to check for these errors and get them rectified as soon as possible. 

Some aspects that may contain errors include incorrect account details, spelling errors in your personal information, addition or duplicate accounts, wrong or non-pending overdue reflecting in your account, or inaccurate collateral details. 

Check for these details in your account periodically and raise a concern if you observe any discrepancies. After rectification is done by the bureau, you will observe a significant rise in your CIBIL score. Also, remember to keep an eye out for suspicious activities associated with your credit accounts. 

Don’t Opt for Loan Settlement

Sometimes, you may not be able to replay your dues in time due to some emergencies that cause financial strain. In such cases, banks or other financial institutions may recommend a one-time settlement. You get extra time to clear the dues as a one-time payment. 

However, you must always keep in mind that a “loan settlement” is not the same as a “loan closure.” While a loan settlement’s goal is to help you clear your dues from the debt, it will negatively impact your credit score. 

Basically, when you agree to a loan settlement, it is a reflection of the fact that you are incapable of paying off your debts within the due date or are unable to pay the full amount back. So, if you want to know how to increase CIBIL score from 600 to 750, the answer is - never opt for loan settlements!

Opt for a Secured Credit Card Against a Deposit 

If all your credit accounts are settled or you are unable to pay your total due amount on time, your credit score will reduce dramatically. When this happens, lenders will be reluctant to give you money, and there will be no way for you to improve your CIBIL score through credits or loans. What do you do in this scenario?

You must get a secured credit card in order to rebuild your profile. For this, you need to set a specific amount as a fixed deposit against which you will get a credit card. But how to increase your CIBIL score through this method? 

By making small expenditures using this credit card every month and then paying the dues back on time, you will be able to improve it gradually. Once you have built a good score and established your creditworthiness, you can go back to opting for normal credit cards and loans. 

Issue Starter Loans 

If you are new to the world of credit or you have had a significant setback in your credit score recently due to personal or professional problems, you can take a starter loan. 

A starter loan is a small amount that you can issue as a personal loan. These are known to have interest rates that are higher than usual. However, the benefit is that if you keep making the repayments diligently, you will be able to improve your credit score. 

This is not the most conventional way when it comes to increasing your CIBIL score. However, it proves to be effective when you are looking for a fresh start. 

Plan Your Loans Smartly 

Another answer to the commonly asked question – how to increase my CIBIL score – is that you should strategically plan your loans. When you apply for loans without a solid plan in place, you may end up feeling frustrated when it comes to paying the EMIs. 

That is why you must use an EMI calculator to understand how much you need to pay in each installment and for how many months these EMIs will continue to be deducted from your account. 

The best approach to achieving and maintaining a very high credit score is to plan your loans beforehand and then stick to the cycle of timely payment of dues. 

Get the Loan Options for Better Financial Management: Choose Hero Fincorp Today! 

Now that you have learned how to increase CIBIL score, you must be looking for the lender that offers you the safest loan options. Hero Fincorp is one of the most trusted and reputed NBFC brands in India, offering you numerous kinds of loans with minimum documentation hassle. The different loan options offered by Hero Fincorp include: 

• Personal loans

• Business loans 

• Used car loans 

• Two-wheeler loans 

• Electric two-wheeler loans 

• Loyalty loans 

• Loan against property

• Loan against car

In addition, if you have questions related to CIBIL scores or credit reports, you can get in touch with our expert team. We are eager to cater to your financial needs and help you in whichever way possible! 

Conclusion

Maintaining a high CIBIL score shows how responsibly you are managing your finances and whether you are a creditworthy individual or not. For those thinking about how to improve my CIBIL score, the 11 valuable tips discussed here will prove to be extremely beneficial. Once you have an impressive credit score that falls under the “Good” or “Excellent” category, you can apply for loans, negotiate the lowest interest rates, and enjoy better repayment terms as well. 

If you are also looking for the loan lenders across the nation, you must choose Hero Fincorp. We have a comprehensive range of loan options that will suit your requirements. To explore these options, visit the official website now! 

FAQs

How can I improve my CIBIL score immediately?

There is no way to improve your CIBIL score overnight, but you can definitely take a few steps to increase it gradually. These include paying off your debts, making EMI and credit card repayments on time, getting any incorrect information on your CIBIL report corrected, maintaining a good credit mix, and keeping your credit utilization ratio below 30%, among many others. 

Is it possible to get a CIBIL score of 900?

Getting a perfect CIBIL score of 900 is possible but also very rare. You need exceptional and flawless financial management for the same. However, even if you know how to increase CIBIL score from 600 to 750 and are able to achieve it, you will be able to enjoy the most amazing benefits. 

How can I reset my CIBIL score?

You cannot reset your CIBIL score as per regulations. Nonetheless, you can achieve the ideal score by knowing how to increase your CIBIL score and taking the right steps consistently. 

Is a 748 credit score sufficient?

748 is considered a “good” credit score. That being said, if you want to avail yourself of the maximum advantages, it is suggested that you achieve an “excellent” CIBIL score, that is, between the range of 750 to 900. 

Will my CIBIL score be affected if I am late for repayment by one day?

Usually, your CIBIL score is not impacted negatively if you make the repayment late by one or two days. However, anything beyond that or multiple missed due dates will definitely bring your credit score down. 

Can I get a loan of INR 50,000 if I have a CIBIL score of 700?

Yes. If your CIBIL score is 700 or above, you can get a personal loan of INR 50,000 with reasonable interest rates and good repayment terms. However,  if you have a lower score, you should first learn how to increase CIBIL score, achieve it, and then apply for a loan or credit.