How Can You Increase Your CIBIL Score Instantly?

The CIBIL score is an important rating that has a direct impact on the approval of your loan, as well as the interest charged. It refers to a three-digit score between 300 and 900, which is the result of a credit scoring model of TransUnion CIBIL, an Indian credit information company. Usually, a rating above 750 is considered very good, while that of below 600 is considered unsuitable.

A poor rating can cause the lender to reject your application or charge you a higher rate of interest. This is because a low CIBIL score signifies reduced creditworthiness and means that you are more likely to default on repayment. It is a result of various things such as excessive credit card debt or acquiring too much debt. It is important to identify the problems that give you a poor score and tackle them.

Here are some measures that you can take to increase your CIBIL score instantly

Wipeout Outstanding Balance on Your Credit Card

• Outstanding balance on your credit card signifies that you have unpaid dues. It is important to gradually clear these dues.
• You can do this on a monthly basis and show an improvement in your credit score over time.
• You can also put in place the practice of regularly monitoring the outstanding balance of all your credit cards to keep a track of payment deadlines.

Pay off all old debts

• It is important to inculcate the practice of clearing all your old debts before taking on more loans.
• Pending debt will certainly give you bad credit history and lower your score. This will subsequently reduce your creditworthiness.
• Paying off all your old debts shows responsible management of finances.

Refrain from accumulating many debts over a short period of time

• Over-borrowing is the primary reason for a poor credit score. More than one debt is good for your credit mix only if it is being repaid regularly.
• A large amount of unpaid debt only worsens your credit history as it projects you as financially unstable.
• This hinders your chances of being able to receive a loan in the future. It also causes lenders to increase the interest rate.

Make timely EMI payments on all your loans

• When you default on EMI payments because you have insufficient balance in your loan account, your credit score falls.
• This is because the score assumes you don’t have funds to make the payment. So, making regular EMI payments reflects positively on your credit score and keeps it stable.
• To ensure that you make timely payments, it is important to track deadlines and plan for payments well in advance.

Reduce the number of credit cards and maintain a good repayment history:

• If you have several credit cards, make it a point to only use one or two credit cards. Repay these on time and discontinue the rest.
• Using the oldest card with the best credit history shows that you have consistently repaid debts over a long-term and improves your credit score.
• The longer you continue to use the oldest credit card and repay its bills on time, the more your credit history will improve.

Increase the credit limit on your credit card:

• Exceeding your credit limit is a definite sign of over-borrowing. This leads to fines or penalties being levied. When this continues over time, it lowers your credit score.
• So, it is wiser to increase your credit limit to suit your expenses. You can also consider revising your spending habits to ensure that you don’t cross the credit threshold.

Following these measures will definitely improve your credit score. So, if you’re planning to apply for a loan of any kind, it is worth starting the process of improving your CIBIL score immediately. Once you’re happy with your credit score, choose a feature-rich loan, such as Personal Loan. You can enjoy benefits like online application, quick approvals, flexible tenor, and more.