Different parameters are used by different lenders for issuing a loan amount to the borrowers. The Reserve Bank of India has stated that all banks should check the CIBIL score of every loan or credit card applicant during the time of evaluation.
A CIBIL report is a detailed document that highlights your entire credit history and record. This includes info about your persona and contact information, employment history, the credit limit for various credit cards, balance, and dates on when you opened various accounts. These CIBIL reports are then viewed by various parties or organizations.
But you can’t increase your credit score overnight. A Credit score includes your credit report, not just of your present actions but also your past actions. So here are some steps that you can take now to start on the way to better credit. If you want a loan then contact us at Kreditdeal .
10 Steps To Improve Your CIBIL Score And Creditworthiness
Is your CIBIL or credit score low? Are you planning to apply for a new loan or a credit card for your future endeavors?
If your CIBIL or credit score is not good enough then here are a few steps that can help you to improve it:
- Checking Your Credit Report
The first step to improvement is to check your Credit Reports regularly. This will tell you two critical pieces of information about your credit score.
First about the defaults and the delayed payments that exist in your loans or credit cards and which has brought down your credit score.
Secondly, it will tell you about the recorded information of the credit report. This helps in fixing the credit score. For instance, if you notice that there is negative information about your credits regarding the defaults or delays in payments, then you can always approach the bank and CIBIL to recover the situation.
- Eliminating Your Credit Card Balance
Unpaid dues or balances and payments of Loan EMI and installments are some of the measure reasons that pull your score down. Paying off this amount at the right time will positively reflect on your CIBIL or credit score. So try to spend as much as you can repay within the billing date. This also includes unpaid dues on loans and EMIs.Discuss with your lender and negotiate to close your loan account by paying off any unpaid dues.
- Maintaining Accuracy Regarding Disputes
Mistakes can happen from any side as even lenders can also make errors at the time of data entry. Also, any financial institution must act on these disputes within 30 days.
Once the error is solved, it will show improvement in your CIBIL or credit score. So don’t apply for new credit without resolving old issues as this may affect your score.
- Keep A Track On Your Old Debt Report
Most of us believe that old debt accounts which are not in use should be closed. It is because we don’t know the impact of it on our CIBIL or credit score. Leave old debt and good accounts on as long as possible is one of the effective ways to improve your credit score.
- Paying EMI on Time
Paying EMIs on time is very important as it is one of the most important things that CIBIL or other credit scorer looks into while giving you the credit ratings. Even if you have huge savings, a drop in CIBIL score can shatter all your dreams regarding the future. Paying EMIs and bills on time can keep your creditworthiness intact.
- Don’t Hint at Risk
Sometimes one of the best ways to improve your credit score is not to do something risky. Two of the biggest risk that one should avoid are;
- Missing payments
- Suddenly paying less than you normally do.
- Demonstrate the Reliability of Bill Payment
Although your credit report does not include information about your every payment. But try to pay for these services in due time. Or your credit provider may refer your debt to a debt collector or may report your debt to a credit reporting agency.
- Track Your Credit Utilization Ratio
Do not try to use your credit card for everything. Instead, keep the credit utilization ratio of a credit card up to 30% or lesser.
- Increasing Your Credit Limit
This simply means that you have a lot more credit available at your disposal. But if you keep your credit utilization low, then it will have a positive impact on your CIBIL or credit score.
- Targeting Of Joint Applicants
In this type of case if you are the joint application for someone’s else loan and they have defaulted on payments, then you too will lose out on your CIBIL or credit score. This is because it will reflect in your report too.
The best way to avoid this is to make sure that the loans and cards are being paid on time and also try to avoid joint credit terms.
Importance Of CIBIL Score
- CIBIL score is the single biggest determinant for you while availing of a loan, making it critical to maintain our credit scores.
- CIBIL is the most trusted credit rating bureaus in India.
- Credit or CIBIL scoring technique is trusted by most banks and NBFCs as the accuracy level is far better than other credit bureaus operating in India.
- CIBIL score is the first impression of the applicant in front of the credit lenders.
- CIBIL score improves our chances of getting a loan/credit and also helps us get a better interest rate from lenders.