Boost Your Credit Score: Tips to Achieve and Maintain a Healthy CIBIL Score

The CIBIL score reflects the credit history of an individual and lets the lenders understand how reliable an applicant is as a borrower. It is a three-digit number ranging between 300 and 900.

An ideal CIBIL score is a rating of 750 and higher and represents better creditworthiness of an individual.

Source : ABPLIVE AI

Credit is an easily available commodity in today's market. However, there are still some factors that can determine the fate of your home loan application or any other query you make for credit instruments. The major deciding factor in your loan/credit card application is the CIBIL score. Let's try to understand what that is.

What Is CIBIL Score?

CIBIL Score represents the credit bureau's name, the Credit Information Bureau (India) Limited. This is the oldest credit rating agency in the country and works based on RBI's license.

The CIBIL score reflects the credit history of an individual and lets the lenders understand how reliable an applicant is as a borrower. It is a three-digit number ranging between 300 and 900. The higher the CIBIL score, the better chances you have of gaining access to credit from financial institutions.

An ideal CIBIL score is a rating of 750 and higher and represents better creditworthiness of an individual. Several factors can have an impact on this score such as credit card applications, due payments, credit history, credit mix, etc. Any lender will always verify your CIBIL score before deciding on your loan/credit card application.

Tips To Boost Your Credit Score

This score cannot be improved overnight. You will need to follow certain pointers and implement them in your financial plans on a regular basis. This can help boost your CIBIL score gradually. Let’s take a look at some of the major steps you can take for this.

Repay EMIs On Time

It is crucial to ensure you don’t miss any payment deadlines on loans or credit cards or EMI dues. Not only will missing these due dates incur a penalty on your account, it will also have a negative impact on your credit score. To help be punctual about such deadlines, you can set reminders in your mail or phone calendars. 

Clear Credit Cards Dues Timely

You should plan your finances in an efficient manner which takes into account the dues you owe on the credit cards as well. Often, individuals use credit cards recklessly and end up owing more than their paying capacity on these devices. Any non-payment of credit card dues and regular defaults on these can severely damage your credit score. If you are unable to pay the complete amount due on your card before the deadline, atleast clear the minimum amount due so that your credit card provider doesn’t label you under non-payment of dues category.

Avoid Multiple Applications For Credit Cards

There are two kinds of credit enquiries, namely, soft and hard enquiry. A soft enquiry involves you checking your credit score to access your financial health. This has no impact on your credit score. 

However, if a lender or credit card provider seeks your CIBIL credit report from the credit bureau against your credit application, it is considered a hard enquiry. This enquiry if conducted occasionally remains unlikely to impact your credit score, however, if you put in multiple enquiries in a short period of time, it can make you appear desperate for credit and impact your creditworthiness. This can make a lender doubt your credit application and reject your card/loan request.

Avoid Closing Older Credit Card Accounts

Banks tend to trust applicants with a longer credit history. This allows them to check their credit activity and verify if they tend to pay the credit dues on time. So having an older credit card account allows a bank to establish your creditworthiness.