Things You Should Do To Keep Your CIBIL Score High
A CIBIL score is one of the most crucial determinants of loan approval as it establishes an individual’s creditworthiness. For instance, a good CIBIL score indicates timely repayment of debt along with other responsible financial habits.
Contrarily, a poor score can lead to the delay or even rejection of loan application. Changing one’s financial habits can, however, help in credit score improvement.
Some useful tips to increase your CIBIL score
Most lenders conduct a thorough analysis of an applicant’s CIBIL score before approving a loan. The reason behind is that the score is one of the most reliable ways to gauge one’s loan repayment capacity. This factor also becomes vital when one is applying for an unsecured advance like a personal loan which does not require collateral or security.
Following are some of the ways through which one can maintain a high CIBIL score.
- Make consistent and timely repayment of debt
One of the most convenient ways to keep a high CIBIL score is being consistent in loan repayment. Primarily, a score of 750+ can ease loan approval. Hence, if you have a good financial record of repaying previous loans in time without fail, it would reflect positively on your CIBIL score.
- Avoid availing multiple loans simultaneously
Servicing multiple loan liabilities at a time deems one as a risky borrower to the lender while bringing down his/her repayment capacity. Such applications also send a hard enquiry on one’s credit score and leave a negative impact. It is thus best to avoid availing multiple loans at a time.
- Maintain a decent credit utilisation ratio
A credit utilisation ratio of 30% or less can be instrumental in increasing one’s CIBIL score. Such ratio represents the percentage of the amount utilised against the total credit available. One can maintain this ratio by opting for a high credit limit as well. When holding a high credit limit and spending less, one leaves an impression of better repayment capability.
Along with a good CIBIL score, you must consider other factors that ascertain your loan eligibility before applying.
Must Read: Know How You Can Boost Your Cibil Score
