3 WAYS TO INCREDIBLE CIBIL SCORE

CIBIL SCORE

A CIBIL score is a three-digit numeric summary of the credit history and behavior of an individual that lies between 300 and 900. It is generated by the major credit bureau operating in India, TransUnion CIBIL. It is generated based on the credit report of an individual that contains all the information regarding loans taken, credit cards issued, and the payment history.

The CIBIL score can be put into categories as follows:

POOR CIBIL SCORE

300-549 – It shows that one is at a high risk of default.

FAIR CIBIL SCORE

550-649:- It means the credit risk profile is moderate but is definitely not favorable to the lenders.

GOOD CIBIL SCORE

650-749: It signifies good credit management and fair change of loan being approved.

EXCELLENT CIBIL SCORE


750-900: – It means minimum risk of default and offers a fair chance of loan approval along with good terms.

The higher the score means high creditworthiness, which means high ability to acquire a loan or credit cards, or low interest rates at banks and other financial institutions. Major factors that affect the CIBIL score include repayment history, credit utilization, credit mix, and length of credit history.

CIBIL SCORE

ALl the Banks in India are governed by the rules and regulations formed by the Reserve Bank of India.

Improvement of CIBIL score requires constant financial discipline and good management of credits. Three effective ways to improve your score:

1.On-Time Loan and Credit Card Repayments
Make sure that all loans and credit card dues are repaid well in time. Missing due dates or paying late impact the score negatively.

  • You may set up auto-debit or reminders so it will not be forgotten.

2.Have a Low Credit Utilization Ratio
Try to have your credit utilization ratio as low as possible, below 30%. This means you are using less than 30% of your total available credit limit.

  • If you’ve used most of the money on your credit cards, reduce that balance or request a limit increase to lower the ratio.

3.Limit Multiple Credit Inquiries
Every time you apply for a loan or for a credit card, lenders place a hard inquiry on your credit report, which could potentially reduce your CIBIL score temporarily.
Limit your loan/credit applications. Apply for credit only when it is actually needed.
Your score will then start increasing little by little.

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