How to Improve CIBIL Score of Yours?

CIBIL score is an often repeated term that you must have heard innumerable times around you. People talk about it because it is like a mark sheet that you used to get in your childhood after the exams. The only difference is that instead of marks, it shows how well you handle all your debts. CIBIL score is a 3-digit representation of your creditworthiness and shows your financial behavior.

Ranging from 300 to 900, the CIBIL score holds a pretty important role in determining your worthiness while getting any kind of credit facility. In our country, there are mainly four credit agencies that keep a record of all your financial transactions. These are Credit Information Bureau of India Limited (CIBIL), Experian, CRISIL, and CRIF High Mark. Talking about the score, anything above 700 is considered to be a good credit score and a low credit score automatically decreases your chances of getting a loan facility.

One of the burning questions of today’s times is how to improve CIBIL score in an organic way so that you won’t face any kind of difficulties while applying for the loan. If you’re also someone who is googling how to improve CIBIL score repeatedly, then this article will be a perfect read for you. We will also be telling you about the importance of your CIBIL score.

What are the various ways to solve the question - How to Improve CIBIL Score?

You must keep an eye on the below-mentioned points to improve your CIBIL score organically. These are the points that will surely help you in boosting your credit score gradually.

By paying your bills on time: We all use our credit cards for paying our utility bills, online shopping, etc. What is most important that you remember to pay your credit card bills on time to gradually build your credit score. If you make a habit of always paying the bills after the due date, it will show your irresponsible behavior with the debt management and hence, will have an impact on your credit score. So the first step would be paying your bills on time.

Try to reduce your Debt: On having a large amount of debt for a period can have a negative impact on your CIBIL score. One of the best solutions to your question of how to improve CIBIL score is to pay off all your outstanding debts so that you can start afresh. As soon as you settle all your debts, your CIBIL score will start to increase gradually. You can also try to increase your income by starting something you always liked. That will also help you in paying your debts on time.

Use your Credit Card intelligently: One of the biggest reasons of having a low credit score is the unnecessary usage of credit cards by individuals. If you keep exhausting your credit limit every month, it may have a bad impact on your credit score. So it’s important to use your credit card by using your wits and within your repayment limit. If you won’t be able to pay your bills on time, it will hamper your credit score.

By keeping your Debt-to-Income (DTI) Ratio Low: You must be wondering what is this? Well, the DTI ratio can be calculated by dividing all your debts such as outstanding credit card payments, EMIs of a home loan or personal loan from your monthly income. A low debt to income ratio shows better creditworthiness of an individual. It is best calculated on a monthly basis. Most lenders look for a minimum 40% debt to income ratio before sanctioning any kind of credit facility.

What are the various advantages of having a good CIBIL score?

Now that you know the answer to your question of how to improve CIBIL score, look at the advantages you can get by having a good CIBIL score.

• Lower Interest Rate
• Faster Loan Approval
• Higher Loan Amount