CIBIL Score - 5 Ways to Achieve, Maintain & Improve it.

 

According to the credit information company, CIBIL, the chances of your loan application being approved is as high as your CIBIL score is closer to 900. Generally, a score of 750 and above is considered a good score by the banks and non-banking finance companies while they check the creditworthiness and loan eligibility of a loan applicant.

The important thing to keep in mind is what effects the credit score. A person's CIBIL score plays an important role in determining their creditworthiness and loan eligibility. A lender, such as a bank or a non-bank finance company will assess a potential borrower's CIBIL score to determine the loan eligibility and deciding whether or not to approve loan to a person. Here are the five ways to achieve and improve your CIBIL score and thus your Loan Eligibility.


1 Don't delay or skip your EMIs and Credit Card bill payments...

Most credit bureaus consider timely and continue repayments of credit card bills and loan EMIs as a key factor to calculate the CIBIL score or credit score. Therefore to build and maintain a good CIBIL score or credit score, the first step is to pay your credit card bills and loan EMIs regularly and timely. 

2 Maintain Credit Utilization Ratio (CUR) within 30 percent...

Utilization of more than 30 percent of the available credit limit is considered as credit hungry behavior and credit bureaus may reduce the CIBIL score or credit score in such cases. In order to avoid such reduction in CIBIL score or credit score the credit card holder should approach the card issuer to increase your credit limit so as to keep your Credit Utilization Ratio (CUR) low.


3 Don't apply for multiple loans or credit card applications within a short span...

Whenever someone applies for a loan or credit card, the lender enquires to the credit bureau for applicant's CIBIL score or credit score to confirm his/her creditworthiness. All such enquiries from lenders are considered as hard enquiries by the bureau and on each of such hard enquiry, the bureau reduces some points from applicant's CIBIL score or credit score.

More frequency of such hard enquiry may reduce the CIBIL score or credit score very rapidly. The alternative way to apply for different loans or credit cards could be applying them through some online marketplace or service provider (like applyyourloan.com or paisaplans.com) as the enquiry made by such service provider is considered as soft enquiry and no points are deducted from the CIBIL score or credit score of the applicant on the same time such soft enquiry may be used to present to multiple lenders simultaneously. 


4 Stay updated about your credit report of the credit bureaus...

The credit bureaus calculate your CIBIL score or credit score on the basis of your credit information provide by lenders. Any error or misinformation from the lender may lead to lower your CIBIL score or credit score. To avoid any such error, just review your credit report from the relevant credit bureau and if you find any wrong information such as late or missed payments etc, just ask your lender to inform the bureau about the mistake and take the corrective measures. 


5 Avoid cancelling or changing your old credit cards...

An old credit card with fair history of bill payments makes your credit history strong in the credit bureau which is considered as a positive sign while the bureau calculate your CIBIL score or credit score. Many credit card issuers may propose you to close/surrender your old card and switch to a new one with more attractive offers and deals but you should avoid changing or cancelling the old card with a fair bill payment history in order to increase your CIBIL score or credit score.




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