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How to increase CIBIL score - 10 Easy Tips

by
Beverly Noronha
Oct 15, 2022

Credit scores are the backbone of your financial health. A bad CIBIL score can impact your future loans and lines of credit. Here are some steps that you can take to start repairing your credit score.

How to Increase CIBIL Score - 10 Easy Tips

When one cannot put in money from the pocket, they approach for a loan. CIBIL report comes into play here. A credit score or CIBIL score ranges from 300 to 900. Credit scores come in use by banks, lenders, and Non-Banking Financial Companies (NBFCs) to determine if the borrower is trustworthy. Read this if you want to understand credit scores better. Understanding how to increase CIBIL score helps you become the ideal borrower.

Understanding what is a credit score

A higher CIBIL score can get you quick loan approvals and longer credit tenure. It is proof of your reliability and responsibility with money. Here are some different credit score ranges and their possible effect on your loans:

Credit score range Meaning Impact
Not Applicable (NA) or No History (NH) - A lack of credit history might lead to more rejections, a high rate of interest on loans, and greater difficulty securing unsecured loans
300 to 549 Poor This CIBIL score range might be due to many missed or delayed payments. A low score indicates high risk for lenders which is why you might face more loan rejections
550 to 649 Fair If you are in this range, it might indicate that you have struggled to pay dues on time but are working on credit score improvement. You might still face some hard inquiries and loan rejections
650 to 749 Good This is a healthy CIBIL score which means that you are on the right path and can improve your credit score further. You are more likely to get loan approvals but you might still not have enough negotiation power to get the best interest rates
750 to 900 Excellent This is an excellent credit score that indicates high credit trustworthiness. You will have more negotiation power for loans. Lenders may offer credit with lower interest rates, unsecured loans, and lower EMIs

Now that you understand how your three-digit credit score can impact future loans, you must know how to improve CIBIL scores immediately. Click here to enter text.

‍Steps on how to increase cibil score fast

Improving and repairing your CIBIL score is easy and smooth if you know the perfect way. Learn how to increase CIBIL score, and you will have an excellent score to flaunt in time.

Make Payments on Time

Payment delays or missed EMIs can negatively impact your credit score. You can simplify the process by setting a personal reminder or completing an Electronic National Automated Clearing House (eNACH) registration with the bank. eNACH automates payments with a one-time authentication to register your net banking or debit card details. Timely payments are the first way to cover yourself.

Maintain a 30% Credit Utilisation Ratio

All credit cards have a credit limit. The amount of credit in use divided by the total credit limit will give you a percentage called the Credit Utilisation Ratio (CUR). A CUR under 30% indicates you are doing well managing your credit. If you spend the entire credit limit, it can damage your credit score. If you are concerned about your CIBIL score, it is vital to do regular checks.

Check Your CIBIL Score Regularly

Regular CIBIL score checks can help you understand your financial health and check for inaccuracies or misinformation. Check the TransUnion CIBIL website for a free credit score check online. If there is any inaccurate data or a problem, raise a concern and get a CIBIL correction online. A CIBIL report correction can help you understand where you stand in your credit journey. Each credit inquiry can have a small impact on your credit score.

Avoid Multiple Credit Applications

How to increase CIBIL score comes with going for credit applications as per the need. Banks and financial institutions submit a credit enquiry when you apply for a loan or a new line of credit. Too many credit cards or loans in a short time adds a negative impact and can impact your CIBIL score. Apply for fresh credit only when you need it. You can also maintain or improve your score by being witty about the kind of credit you take.

Balance Your Credit Type

Secured and unsecured are the two types of loans available. Secured loans require the borrower to place something as collateral. The collateral is a seizable property for the lenders if the borrower defaults. Some secured loans are home loans or vehicle loans. They involve less risk for lenders. 

Unsecured loans come with a sanction without collateral. It includes personal loans, education loans, or business loans. These collateral-free loans involve more risk for the lender. Credit cards are also considered unsecured credit.

It is vital to opt for a mix of secured and unsecured loans because payment delays for unsecured loans can negatively affect your credit score. Not only does the type of credit matter, but the duration matters!

Do Not Close Old Credit Accounts

How to increase CIBIL score comes with keeping an old unused credit account open. It might seem odd, but it can directly impact your CIBIL score. Credit-scoring models reward borrowers for having a long credit history. When you shut down a credit account, it nullifies your previous record with the lending institution and can negatively impact your CIBIL score.

Many people have a misconception that closing unused credit cards helps, but there is also a big misunderstanding about co-signing for loans. Read on to clear your doubts.

Be Careful With Co-signed Loans

Co-signing a loan means you are responsible for paying the total loan amount if the borrower cannot pay. It is not the same as serving as a character reference for someone. If the other person misses payments or defaults on the loan, it will impact you. It will lower your credit score. 

How to increase CIBIL score needs responsible and careful co-signing. Always keep track of the loans you have co-signed or avoid co-signing for loans. If repayment is your concern, pick the people you co-sign for a loan right.

Never just Pay the Bare Minimum

When a borrower keeps paying the minimum amount due for a credit card, it leads to an unpaid balance. It can signal financial instability. The minimum amount due is usually 5% of the total outstanding amount. It also comes along with any unpaid balance from the previous billing cycle. Continuously paying the minimum can reduce your credit score and credit limit.

Avoid Paying Credit Card Bills in a Lump Sum

As you can see, repayments are vital but in an efficient manner. It is best not to pay the bare minimum but also not to pay a large sum at once. Learning how to increase CIBIL score comes with never paying a large sum at once. It can indicate financial instability. It can lower your credit score. It is best to pay back your loans and EMIs on time effectively and efficiently.

A good credit score can help you improve your chances of getting a loan or credit card. It can also aid you with other financial benefits. Understanding the tips to improve your credit score over time helps. It takes six months to a year to reflect in your credit report. If you wish for an improvement, you must start the process now. If you are looking for an education loan, the best interest rate or amount comes with a promising credit score.

Propelld's Customised Loans

Knowing how to increase CIBIL score is vital as banks and financial institutions assess CIBIL scores to approve or reject a loan. Propelld provides student-friendly loans for education. It takes the student's academic performance and future earning potential into account for the loan.

The loan application process is 100% digital. It offers a quick loan sanction within 48 hours. These collateral-free student loans can help you fund the programme of your choice. All you have to do is pay your Propelld EMIs on time to maintain a healthy CIBIL score.

A good credit score is important for a smooth financial journey. Take charge of your credit health and remove any financial barriers to the education you deserve with Propelld

CIBIL Score FAQs

What is the fastest way to improve my credit score properly?

The best way to improve your credit score is by making timely credit card or loan payments. Try to make the exact EMI payment instead of lump sums or the bare minimum amount.

How can you do a credit score check online?

You can do a free credit score check by logging onto the TransUnion CIBIL website and opting for a ‘free CIBIL score and report.’

How can I improve a CIBIL score after a loan settlement?

If you delay any payment, you might still have a low credit score after paying a loan. You can improve your CIBIL score by clearing any outstanding balance in your account.

How can I increase my CIBIL score from 600 to 750?

Besides repaying loans or credit cards on time, you can slowly improve your score by maintaining a good CUR. You can also increase it by not taking multiple lines of credit. Take credit for your needs and not wants.

How to increase CIBIL score - 10 Easy Tips

Beverly Noronha
October 15, 2022
memberstack logo
Shivam Bhardwaj
March 15th 2022
Table of Contents

How to Increase CIBIL Score - 10 Easy Tips

When one cannot put in money from the pocket, they approach for a loan. CIBIL report comes into play here. A credit score or CIBIL score ranges from 300 to 900. Credit scores come in use by banks, lenders, and Non-Banking Financial Companies (NBFCs) to determine if the borrower is trustworthy. Read this if you want to understand credit scores better. Understanding how to increase CIBIL score helps you become the ideal borrower.

Understanding what is a credit score

A higher CIBIL score can get you quick loan approvals and longer credit tenure. It is proof of your reliability and responsibility with money. Here are some different credit score ranges and their possible effect on your loans:

Credit score range Meaning Impact
Not Applicable (NA) or No History (NH) - A lack of credit history might lead to more rejections, a high rate of interest on loans, and greater difficulty securing unsecured loans
300 to 549 Poor This CIBIL score range might be due to many missed or delayed payments. A low score indicates high risk for lenders which is why you might face more loan rejections
550 to 649 Fair If you are in this range, it might indicate that you have struggled to pay dues on time but are working on credit score improvement. You might still face some hard inquiries and loan rejections
650 to 749 Good This is a healthy CIBIL score which means that you are on the right path and can improve your credit score further. You are more likely to get loan approvals but you might still not have enough negotiation power to get the best interest rates
750 to 900 Excellent This is an excellent credit score that indicates high credit trustworthiness. You will have more negotiation power for loans. Lenders may offer credit with lower interest rates, unsecured loans, and lower EMIs

Now that you understand how your three-digit credit score can impact future loans, you must know how to improve CIBIL scores immediately. Click here to enter text.

‍Steps on how to increase cibil score fast

Improving and repairing your CIBIL score is easy and smooth if you know the perfect way. Learn how to increase CIBIL score, and you will have an excellent score to flaunt in time.

Make Payments on Time

Payment delays or missed EMIs can negatively impact your credit score. You can simplify the process by setting a personal reminder or completing an Electronic National Automated Clearing House (eNACH) registration with the bank. eNACH automates payments with a one-time authentication to register your net banking or debit card details. Timely payments are the first way to cover yourself.

Maintain a 30% Credit Utilisation Ratio

All credit cards have a credit limit. The amount of credit in use divided by the total credit limit will give you a percentage called the Credit Utilisation Ratio (CUR). A CUR under 30% indicates you are doing well managing your credit. If you spend the entire credit limit, it can damage your credit score. If you are concerned about your CIBIL score, it is vital to do regular checks.

Check Your CIBIL Score Regularly

Regular CIBIL score checks can help you understand your financial health and check for inaccuracies or misinformation. Check the TransUnion CIBIL website for a free credit score check online. If there is any inaccurate data or a problem, raise a concern and get a CIBIL correction online. A CIBIL report correction can help you understand where you stand in your credit journey. Each credit inquiry can have a small impact on your credit score.

Avoid Multiple Credit Applications

How to increase CIBIL score comes with going for credit applications as per the need. Banks and financial institutions submit a credit enquiry when you apply for a loan or a new line of credit. Too many credit cards or loans in a short time adds a negative impact and can impact your CIBIL score. Apply for fresh credit only when you need it. You can also maintain or improve your score by being witty about the kind of credit you take.

Balance Your Credit Type

Secured and unsecured are the two types of loans available. Secured loans require the borrower to place something as collateral. The collateral is a seizable property for the lenders if the borrower defaults. Some secured loans are home loans or vehicle loans. They involve less risk for lenders. 

Unsecured loans come with a sanction without collateral. It includes personal loans, education loans, or business loans. These collateral-free loans involve more risk for the lender. Credit cards are also considered unsecured credit.

It is vital to opt for a mix of secured and unsecured loans because payment delays for unsecured loans can negatively affect your credit score. Not only does the type of credit matter, but the duration matters!

Do Not Close Old Credit Accounts

How to increase CIBIL score comes with keeping an old unused credit account open. It might seem odd, but it can directly impact your CIBIL score. Credit-scoring models reward borrowers for having a long credit history. When you shut down a credit account, it nullifies your previous record with the lending institution and can negatively impact your CIBIL score.

Many people have a misconception that closing unused credit cards helps, but there is also a big misunderstanding about co-signing for loans. Read on to clear your doubts.

Be Careful With Co-signed Loans

Co-signing a loan means you are responsible for paying the total loan amount if the borrower cannot pay. It is not the same as serving as a character reference for someone. If the other person misses payments or defaults on the loan, it will impact you. It will lower your credit score. 

How to increase CIBIL score needs responsible and careful co-signing. Always keep track of the loans you have co-signed or avoid co-signing for loans. If repayment is your concern, pick the people you co-sign for a loan right.

Never just Pay the Bare Minimum

When a borrower keeps paying the minimum amount due for a credit card, it leads to an unpaid balance. It can signal financial instability. The minimum amount due is usually 5% of the total outstanding amount. It also comes along with any unpaid balance from the previous billing cycle. Continuously paying the minimum can reduce your credit score and credit limit.

Avoid Paying Credit Card Bills in a Lump Sum

As you can see, repayments are vital but in an efficient manner. It is best not to pay the bare minimum but also not to pay a large sum at once. Learning how to increase CIBIL score comes with never paying a large sum at once. It can indicate financial instability. It can lower your credit score. It is best to pay back your loans and EMIs on time effectively and efficiently.

A good credit score can help you improve your chances of getting a loan or credit card. It can also aid you with other financial benefits. Understanding the tips to improve your credit score over time helps. It takes six months to a year to reflect in your credit report. If you wish for an improvement, you must start the process now. If you are looking for an education loan, the best interest rate or amount comes with a promising credit score.

Propelld's Customised Loans

Knowing how to increase CIBIL score is vital as banks and financial institutions assess CIBIL scores to approve or reject a loan. Propelld provides student-friendly loans for education. It takes the student's academic performance and future earning potential into account for the loan.

The loan application process is 100% digital. It offers a quick loan sanction within 48 hours. These collateral-free student loans can help you fund the programme of your choice. All you have to do is pay your Propelld EMIs on time to maintain a healthy CIBIL score.

A good credit score is important for a smooth financial journey. Take charge of your credit health and remove any financial barriers to the education you deserve with Propelld

CIBIL Score FAQs

What is the fastest way to improve my credit score properly?

The best way to improve your credit score is by making timely credit card or loan payments. Try to make the exact EMI payment instead of lump sums or the bare minimum amount.

How can you do a credit score check online?

You can do a free credit score check by logging onto the TransUnion CIBIL website and opting for a ‘free CIBIL score and report.’

How can I improve a CIBIL score after a loan settlement?

If you delay any payment, you might still have a low credit score after paying a loan. You can improve your CIBIL score by clearing any outstanding balance in your account.

How can I increase my CIBIL score from 600 to 750?

Besides repaying loans or credit cards on time, you can slowly improve your score by maintaining a good CUR. You can also increase it by not taking multiple lines of credit. Take credit for your needs and not wants.

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