CIBIL Score – Your CIBIL score is a three-digit number that plays a huge role in your financial life. It basically reflects your credit history how well you’ve handled loans, credit cards, and repayments in the past. A good score means you’re seen as financially trustworthy, while a low score can make it harder to get loans, especially at low interest rates.
If your CIBIL score is low, don’t worry. It’s possible to improve it over time with some simple and consistent steps. But before we dive into how to increase your score, let’s understand what it really means.
What Is a Good CIBIL Score?
CIBIL scores range between 300 to 900. Here’s a quick breakdown:
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- 750 to 900: This is considered excellent. You’ll have better chances of getting loans quickly and at low interest rates.
- 700 to 750: Still good. You can get loans, but you may have to negotiate a bit on the interest.
- 500 to 700: This is a low score. Banks might still give you a loan, but at higher rates.
- Below 500: This is considered poor. It’s tough to get loan approvals, and if you do, the interest rate will likely be high.
Now, let’s talk about how you can increase your score if it’s on the lower side.
1. Review Your Credit Report for Errors
Start by checking your credit report carefully. Sometimes, mistakes can appear — like incorrect loan status, wrong personal details, or missed payments that never happened. If you find any error, raise a dispute with the credit bureau and get it corrected. Fixing these errors alone can give your score a small but helpful boost.
2. Always Pay EMIs on Time
Timely repayment of EMIs (Equated Monthly Installments) is the most important factor that affects your credit score. One or two missed or delayed payments can pull your score down. So, set reminders or use auto-debit features to ensure all your dues are paid on time, whether it’s a personal loan, credit card, or car loan.
3. Avoid Taking Too Many Loans at Once
Applying for multiple loans within a short period signals to banks that you’re credit-hungry or financially stressed. Each time you apply, it triggers a credit inquiry which slightly lowers your score. It’s better to take one loan, repay it properly, and then consider the next one. Keep it slow and steady.
4. Keep Your Credit Card Usage Low
It’s good to use a credit card, but don’t go overboard. Try to keep your credit utilization under 30 percent of your card limit. For example, if your credit card limit is 1 lakh, aim to use less than 30,000 in a billing cycle. This shows lenders that you’re responsible with your credit and not overdependent on it.
5. Start Small If Needed
If your score is too low and you’re finding it hard to get big loans, start small. Take a small personal loan or a secured credit card against a fixed deposit. Make sure to repay on time. These small steps slowly build your score and help regain trust with banks.
6. Clear Off Old Loans
If you’ve got older loans that are still active but not being repaid, clear them off as soon as you can. Old dues continue to show on your credit report and affect your score. Once paid, ensure the loan is marked as “closed” by the lender. This helps clean up your credit history.
7. Keep Your Bank Account Active
Sometimes, your CIBIL score also reflects the activity in your bank account. If your account shows fewer transactions, it may not paint a good picture. Keep your account active with regular transactions, and maintain a healthy balance.
How to Check Your CIBIL Score
Checking your CIBIL score online is easy and you can do it for free. There are several official CIBIL partners and also a CIBIL mobile app. Here’s how you can check:
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- Download the CIBIL mobile app.
- Look for the option to get your free CIBIL score.
- Register as a new user with your details.
- Some plans may charge a fee, usually between 550 to 1200 rupees, if you want detailed reports.
- Fill in your bank and credit-related details to get your score.
By following these steps, you can steadily work your way towards a healthy credit profile. Remember, a good CIBIL score opens the door to easier, faster, and cheaper loans — so it’s worth the effort.