A good CIBIL Score improves your prospects of getting a loan sanctioned, and can result in you being offered a higher loan amount. It can also lead to you being charged a more nominal rate of interest and help reduce the processing time of your loan application, especially for unsecured loans like personal or business loans. Since your CIBIL Score reveals your creditworthiness, it impacts the lender’s trust in your repayment abilities. So, if you have a low credit score, consider ways of improving and increasing it.
Here are a few ways to help you increase your CIBIL Score.
1. Borrow more only after you repay
Borrowing excessively within a short span of time causes your credit score to fall. So, steer clear of over-borrowing. Prioritise your needs and only borrow loans that are affordable for you. One convenient yet affordable option is applying for a loan customised for you – a chartered accountant loan from Bajaj Finance. This loan is credited to your account within 48 hours* and offers up to Rs. 55 lakh at nominal interest.
Do you find your needs for finances unpredictable? Say, for your practice’s working capital or for your child’s education. Then, opt for a Flexi Loan facility rather than a Term Loan. This facility will make timely repayment easier for you and impact your credit score positively.
Additional Read: All you need to know about CA Loans
2. Repay your debts on time
Unpaid debts impact your credit score. If you have any existing debts, make sure you repay them on time. Making part prepayments on your loan also impacts your credit score positively. So, if you have excess funds, ensure you do this.
If you find that you have various debts with different repayment schedules, consider taking a personal loan for debt consolidation. This will help you repay all your debts easily and boost your credit score. You can consolidate all your existing debt with a personal loan for chartered accountants from Bajaj Finance.
3. Use credit cards with care
If you find yourself being unable to pay off your credit card dues, limit their usage. Conversely, if you find yourself using your credit card over the limit, remember that this lowers your credit score. So, get your credit card issuer to increase the limit.
You may use credit cards as long as you are able to pay them off in time. Do think about your debt-to-income ratio (DTI) when it comes to the usage of credit cards. A low DTI will increase CIBIL Score fast while a high DTI will lower it.
4. Build credit history
No credit history can also lead to a low score. So, if you want to build one, consider taking an affordable personal loan for CAs and repay it on time. This will boost your credit score.
5. Avoid making loan enquiries without reason
Making too many loan enquiries leads to a drop in your credit score. Rather than making enquiries, it is better for you to view loan details online and compare the various offers and schemes. Match the eligibility criteria, check the interest rate, and only then apply for your chosen loan.
6. Be careful about signing up as a co-applicant
While someone you know may approach you to sign on as a co-applicant for a loan, be careful about this. Any delay or default in repayment from your co-applicant marks your credit score down too. Implement these practices, and you will witness an improvement in your credit score within a period of six months to a year.
Additional Read: How to get your CA Loan approved easily
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