April 14, 2024

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5 Effective Tips to Enhance Your CIBIL Score

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The credit score or the CIBIL score is an important criterion considered by banks and other lenders for sanctioning loans especially personal loans and issuing credit cards. This three-digit numeric score reflects a person’s credit history and creditworthiness. The score is prepared based on the person’s previous record in terms of borrowing and repayment habits as gathered from the records of various banks and other lenders.

The CIBIL Score ranges between 300 to 900 with a score of above 700 considered to be good by the lenders. So, if you have a credit score of 700 or above, you have a good chance of getting a loan or a credit card since your past behaviour is taken as an indicator of your future actions.

Ways to Boost Your Credit Score

Your CIBIL score is based on your credit history but is a key factor for determining your eligibility to get personal loans in the future. So,you must maintain a good CIBIL score before you apply for a personal loan.You can always use a personal loan eligibility calculator to check whether your credit score is good enough to get you a loan at good terms.

If you wish to improve your credit score, you need to start early as it takes some time to get reflected. Here are some tips to enhance your credit score by screen monitoring software .

Pay All Your Dues on Time

The best way to ensure a high CIBIL score is to make all your due payments on time- whether it is the payment of credit card bills or EMI or any other loan instalment. 

Keep Your Credit Utilisation Levels Low

Credit utilisation refers to the percentage of credit limit utilised by you. So try to ensure that you keep this level to below 30%. You may be eligible for a higher credit limit but try to restrict your usage low to improve your creditworthiness. 

Maintain a Healthy Credit Mix

Ensure that you are availing of a credit mix that includes both unsecured and secured loans. Too many unsecured loans can be viewed negatively and hurt your credit score. 

Check Your Credit History Regularly

Keep a constant check on your credit score to identify any mistakes at an early stage and take steps to get them rectified. Reviewing your credit score will also help you know when to take remedial steps to boost it up. 

Eliminate Your Credit Card Balances

Before you apply for a personal loan, ensure that your credit score is above 700. You can do this by adopting a policy of not carrying over your credit card balances. This means you pay off your credit card bills in totality before the due date and no balances are carried off to the next billing cycle.

Follow these tips and you should be able to boost your CIBIL score and become eligible for getting the much-needed credit to fund your unplanned expenses.

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