It is a well-known fact that keeping a good CIBIL score holds great importance. CIBIL score is a three-digit number (ranging from 300 to 900) that determines your creditworthiness based on your credit history. Therefore, in case you are looking forward to applying for urgent loan approval, make sure that your CIBIL score is towards the higher end (i.e., more than 750). The more close to 900 your CIBIL score is, the more likely you will prove to be a worthy candidate in front of the bank or an NBFC.
Some people still have to realize why people stress so much about maintaining a good CIBIL score. It is because, in India, Reserve Bank of India (RBI) has made it a mandatory task for all the banks or NBFCs to check the CIBIL score before granting any loans.
If you haven’t been paying attention to your CIBIL score and it has reduced considerably, we at ZipLoan know all you can think about is – ‘How to improve CIBIL score immediately?’ Do not fret because it can be recovered. All you need to do is follow the below-mentioned methods religiously, and you can improve the CIBIL score in no time.
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Set Reminders to Repay Your Dues Timely
Missing your EMIs? Delayed payment of your credit card? Then you need to organise your priorities. If you want to improve your CIBIL score quickly, timely payment of dues should top your to-do list. Why? It is necessary because delayed payments for EMIs, loan instalments, or credit cards not only force you to pay the penalty but also negatively impact your credit score. So, it is advisable to set reminders for your outstanding debt payments and learn to be disciplined with credit. Being disciplined also prevents you from adding delayed payments in credit bag.
Keep a Check on Your Credit Report for Possible Errors
To err is human, that is why it is necessary to periodically check your credit reports to ensure that there are no errors. You may think that you’re keeping a good credit history, but there might be several unknown errors in your report that may be affecting your CIBIL score. For instance, many times, you think that you have cleared all your credit card dues from your end. However, it still appears as current due in your statement because of administrative error. You need to recheck such similar errors and resolve them as soon as possible to give your CIBIL score a boost instantly.
Get a Secured Card
Are you unable to get a credit card due to bad CIBIL score? Why don’t you try to get a secured credit card from RBI’s various leading banks? Such leading banks offer you a secured credit card against a fixed deposit. This fixed deposit amount is very nominal, so you don’t need to worry about that. All you need to do next is repay your credit dues on time, and you can improve your CIBIL score quickly.
Refrain from Taking Multiple Loans at One Time
If you are among those people who are applying for various loans for personal or business use during a short period, well, don’t if you want to be in the good books of the banks or financial institutions. The best way to improve your CIBIL score is to apply for one loan at a time. Once you repay one loan, then apply for another. When you apply for multiple loans at one time, it implies that you don’t have sufficient funds to pay them all. Needless to say, one delayed payment makes you a defaulter and push a good CIBIL score farther away.
Keep a Check on Your Credit Utilisation
For every purchase you make, don’t be prompt at swiping your credit card every time. It is a bad practice to utilise your credit card to its extreme limit. To prevent this from happening, keep the 30% rule in your mind. This means that you need to ensure to spend only 30% of your credit limit per month.
For example, Neena had a credit limit of Rs. 1,00,000/month. To maintain a good credit rating, she always made sure that does not pay more than Rs. 30,000 via her credit card.
In the eyes of the banks, when you exceed 30%, it implies that you’re spending without thinking twice about your expenses. Thus, your CIBIL score will drop considerably.
Keep Your Oldest Credit Card Account Active with an Increased Credit Limit
Don’t make the mistake of closing your old credit card account if you can pay your bills in full timely. The older the account is, the stronger is your rapport with the bank, which in turn enables you to increase your credit score in the future. Also, in case your bank advises you (or you apply) to increase the credit limit of your card, never say no. This enables you to manage your expenses wisely. By doing so, you’re able to keep your utilisation ratio low, with a lot more credit at disposal. With this practice, you are able to improve your CIBIL score immediately.
Maintain a Healthy Credit Mix to Create a Credit History
Borrowing loans is also essential to build a credit history with the banks or NBFCs. Without a credit history, your CIBIL score will be low. To create a good credit history, you need to ensure that you borrow a healthy mix of credits, i.e., a combination of secured and unsecured loans, of a long and short tenor. Not only will such practice help you gain access to low-interest rates but in future, you can apply for higher amount loans for personal use also.
We at ZipLoan guide you upon how you can maintain a healthy credit mix that can improve your CIBIL score immediately. These are a few practices to bring change in your credit score. But like every other change, it won’t happen overnight. If you’re patient, smart, and disciplined with your expenses and loans, it is only a matter of a few months (approximately six months) that your CIBIL score will improve considerably.