7 Tips to Increase CIBIL Score Quickly

CIBIL score is an essential factor determining approval and interest for Personal Loans and other loan applications. While a decent credit score makes getting a loan or credit card relatively easier, poor credit can be a major hindrance when seeking urgent funding. Those with a high credit score also have higher chances of getting loans at relatively lower interest rates and with extra benefits.

Most lending institutions do not approve loans for applicants with a low credit score. Even if they get a loan approval, the lender may demand a higher interest rate. If you have a poor credit score, maybe below 600, this article will help you learn how to increase your CIBIL score fast.

Tips to Increase CIBIL Score

There is not just one way to learn how to improve CIBIL scores immediately. Building credit is a process that takes time. You should follow these pointers regularly to improve your credit score gradually:

Check Your Credit Report Regularly

Check your credit report regularly to identify any errors on time and get them rectified immediately. With regular monitoring, you can also keep an eye on your credit rating and take prudent action whenever you notice a dip.

Limit New Credit Applications

While soft enquiries do not impact your credit score, each finance loan application with a loan provider leads to a hard enquiry on your credit report, resulting in a CIBIL score drop by a few points. If you apply for several loans within a short span, multiple hard enquiries will indicate credit-hungry behaviour. It will eventually lead to the rejection of the loan application. Therefore, research and compare the available options before applying for one.

Also Read: What Is CIBIL Score - Credit Score Limit: Meaning And Impact

Clear Outstanding Debts

Strategically plan to clear your outstanding debts by the due date. Your CIBIL score takes the biggest hit when you miss your dues or default. Even a single missed payment will reflect on your credit report under the Days Past Due (DPD) section. If paying the entire bill is difficult, at least clear the minimum due amount to avoid a non-payment of total dues report to the bureau. Although the unpaid amount will incur interest, you will get an extra cycle to clear off the dues and save your CIBIL score.

Review your CIBIL Report for Any Error

Even with a decent credit history, your credit score may be low due to unknown errors in your credit report. Common credit report errors include incorrect account information, personal details, duplicate accounts, mismatched paid-off or overdue amounts, incorrect collateral details, wrong DPD, etc. Check your credit report for such errors and raise a grievance with the credit bureau online to rectify them immediately.

Also Read: How to Increase Cibil Score from 500 to 750

Avoid Settling Loans and Credit Cards

Your old loans and credit cards build your credit history, especially if you have paid your dues on time. Avoid settling such credit lines even if you no longer use them. Their positive history will improve your eligibility when the lender analyses your report for evaluation.

Personalise Your Credit Limit

The credit utilisation ratio significantly impacts your CIBIL score. The more you restrict your credit usage, the better your CIBIL score will be. On the other hand, utilising the credit limit to its max will have the opposite effect on your credit score. One way to avoid this is to contact your lender or credit card provider and request them to customise your limit according to your expenses.

Balancing Secured >Balancing Secured & Unsecured Loansamp; Unsecured Loans

Lenders want to see if you can handle different credit types responsibly or lag in a particular category. Therefore, diversifying your credit portfolio with secured and unsecured loans is the best strategy to improve your credit score.

Also Read: How to Increase CIBIL Score from 600 to 750

Causes of a Poor CIBIL Score

If you are wondering, how can I increase my CIBIL score quickly, you must first understand the causes of a poor CIBIL score and know how to avoid or correct them. These include the following:

Errors in the Credit Report: Check your credit report regularly to identify and correct errors.

Late or Missed EMI or Credit Card Bill Payments: Always pay your finance loan EMIs and credit card bills on time to maintain a consistent repayment history.

Multiple Credit Applications within a Short Span: Borrow only when needed and research properly before applying. 

A High Debt-to-Income (DTI) Ratio: Keep your financial obligations low to maintain a low DTI ratio. 

A High Credit Utilisation Ratio (CUR): Minimise your credit limit or request an increase in your credit limit to maintain a low CUR.

Improper Credit Mix: Diversify your credit portfolio with secured and unsecured loans to balance your credit mix.

No Credit History: Start taking credit early to build a decent credit history.

Also Read: 5 Tips to Improve Your Credit Score in 30 Days

How Does Your Credit Card Affect Your Credit Score?

A credit card affects your CIBIL score in the following ways:

• Card Dues: Missing credit card payments will negatively impact your CIBIL score and timely repayments will improve it.
• Credit Utilisation: Each card has a credit limit, and your credit utilisation significantly impacts your credit score.
• Length of Credit History: Using a card for a long and paying its bills on time will build your credit history. Closing such cards will reduce your score.
• Number of Credit Cards: While multiple cards can be advantageous, not managing them well will negatively impact your credit score. It will indicate your dependence on credit for regular expenses.

Also Read: What Is A Good Credit Score And 5 Tips To Maintain It

Conclusion

If you want to know how to increase your CIBIL score fast, adopt these habits to improve and maintain your credit score for a long time. However, it is not an overnight process and may take a few months to show results. If required, take a finance loan from Hero FinCorp to build or improve your credit score by making timely payments. Once you score well, you can borrow instant short or long-term Personal Loans at competitive interest rates without collateral and end-use restrictions. 

Also Read: How to Get a Perfect 900 Credit Score?

Frequently Asked Questions

1. What is a credit utilisation ratio, and why is it important?

Every credit card comes with a credit limit, up to which you can shop using the card. The percentage of credit limit you use on average is called your credit utilisation ratio. Utilising most of the available credit limit indicates credit-hungry behaviour, ultimately reducing your credit score.

2. Is there a fee for checking the CIBIL score?

CIBIL credit bureau must provide you with one free credit report once a year. If you require more frequent score checks, you must subscribe to a CIBIL plan by paying a nominal fee.

3. What is the lowest CIBIL score required for obtaining a Personal Loan?

A CIBIL score of 700 or above is good enough to obtain a Personal Loan. However, Hero FinCorp may offer finance loans on poor credit as well, but at a slightly higher interest rate for Personal Loans.

4. How does credit score affect loans?

Your credit score matters a lot for your loan approval. The higher the credit score, the better your chances of getting the best loan deal.