3 mins read
12-Sept-2024
Having a good CIBIL Score is essential to gaining access to loans with favourable terms. If your credit score is currently around 600, here are some strategies to help improve it to 750:
Pay your bills on time
Timely payments play a significant role in boosting your CIBIL Score. It is essential to clear your entire due amount instead of just paying the minimum. Delayed or partial payments can negatively affect your score.
Maintain a low credit utilisation ratio
Keep your credit usage below 30% of your total credit limit. This reflects responsible credit use and helps improve your score over time. The lower your credit utilisation, the better it is for your score.
Avoid taking multiple loans or inquiries
Applying for multiple loans in a short period can hurt your score. Each application leads to a hard inquiry, and too many inquiries can reduce your credit score. Keep your credit applications limited to avoid unnecessary hard pulls.
Balancing secured and unsecured loans
Having a balanced mix of secured and unsecured loans positively impacts your credit profile. Secured loans, like home or auto loans, and unsecured loans, like personal loans, help show your ability to manage different types of credit.
Keep old credit accounts open
A long credit history can enhance your credit score. Closing old credit card accounts reduces the length of your credit history and increases your credit utilisation ratio. Keep old, unused credit cards open to help maintain a healthy score.
Build a positive credit history
Gradually build a positive credit history by consistently making payments on time. Over time, this will help push any past negative remarks off your credit report, improving your score.
Check your credit report regularly
Errors in your credit report can negatively impact your score. Make it a habit to review your credit report periodically to ensure accuracy. If you spot any discrepancies, raise a dispute to have them corrected.
Faster approval for loans
Access to more lending options
Better negotiating power for loan terms
Potentially lower interest rates and longer repayment tenures
Discounts on processing fees and other charges
A higher credit score not only increases your chances of loan approval but also helps you secure more favourable terms that can save you money in the long run.
Pay your bills on time
Timely payments play a significant role in boosting your CIBIL Score. It is essential to clear your entire due amount instead of just paying the minimum. Delayed or partial payments can negatively affect your score.
Maintain a low credit utilisation ratio
Keep your credit usage below 30% of your total credit limit. This reflects responsible credit use and helps improve your score over time. The lower your credit utilisation, the better it is for your score.
Avoid taking multiple loans or inquiries
Applying for multiple loans in a short period can hurt your score. Each application leads to a hard inquiry, and too many inquiries can reduce your credit score. Keep your credit applications limited to avoid unnecessary hard pulls.
Balancing secured and unsecured loans
Having a balanced mix of secured and unsecured loans positively impacts your credit profile. Secured loans, like home or auto loans, and unsecured loans, like personal loans, help show your ability to manage different types of credit.
Keep old credit accounts open
A long credit history can enhance your credit score. Closing old credit card accounts reduces the length of your credit history and increases your credit utilisation ratio. Keep old, unused credit cards open to help maintain a healthy score.
Build a positive credit history
Gradually build a positive credit history by consistently making payments on time. Over time, this will help push any past negative remarks off your credit report, improving your score.
Check your credit report regularly
Errors in your credit report can negatively impact your score. Make it a habit to review your credit report periodically to ensure accuracy. If you spot any discrepancies, raise a dispute to have them corrected.
Balancing secured and unsecured loans
To improve your credit score, it's important to maintain a healthy balance between secured loans, like home loans, and unsecured loans, like personal loans. This demonstrates your ability to manage various types of credit and helps lenders see you as a responsible borrower. Having a diverse mix of loans can positively impact your credit score, as long as you manage them responsibly by making timely payments.Importance of improving your score to 750
Achieving a CIBIL Score of 750 or higher can provide numerous advantages, such as:Faster approval for loans
Access to more lending options
Better negotiating power for loan terms
Potentially lower interest rates and longer repayment tenures
Discounts on processing fees and other charges
A higher credit score not only increases your chances of loan approval but also helps you secure more favourable terms that can save you money in the long run.
