Your credit score plays a crucial role in determining the outcome of your loan or credit card. CIBIL score is another word for credit score and is based on your credit history, so this is related to all of your past credits that you have taken and the payment credit patterns you have made.
If your CIBIL score is high, you will be given a preference when processing a credit card or loan application, and you will make an excellent first impression when you are dealing with your banks. Therefore, it is very important to keep it high, and you should always maintain a credit score of 750 or higher in order to get favorable terms for your credit application cards and loans.
How Much Time Do You Need To Increase Your CIBIL Credit Score?
Improving your CIBIL score will be easy if you have been prudent when repaying a loan and never failed on your payments. But, if you have defaulted and you have not been disciplined, you will find it hard to raise it overnight.
It usually takes 6 to 18 months to improve your credit score, but it varies on a case-to-case basis. So, it might be difficult to raise your credit score by 100 points overnight.
When your credit score is improved, it will give confidence to any financial institution to accept your credit application.
Most possible reasons for having a bad credit score are:
- Frequent credit applications
- Credit cards utilization excessively
- Debt settlement
- A long history of credit non–payments in due time
- Closing of an old credit card account
9 Measures To Take To Improve Your CIBIL Credit Score Immediately
You can take the following 9 measures to raise your credit score fast and bring it to decent figures: (1)
1. When rejected, you shouldn’t be persistent in applying for new credits
When you are rejected for an application loan, this information will be recorded in your credit report. So, when you apply for new credit in another bank, they will see your low score, and this may result in another rejection. If you have been rejected, it is always recommended that you wait until your credit score is improved.
2. Limit the utilization of your card
Suppose you want to improve your credit score immediately. In that case, it is advisable to stop using your credit card to the maximum limit and try to limit its utilization and not use it for all transactions and keep the ratio on 30 % utilization, which has a very positive effect on your credit score.
3. Keep track of your monthly payments
It is very recommendable to pay all of your monthly payments on time and even one payment omission will have a very bad effect on your CIBIL credit score. You can use some tools and credit card management applications to get clarity of your credit use without too much analysis, and you will also track your spending patterns.
4. Check your CIBIL credit score on a regular basis
Your credit score changes, and it is not the same through the credit history of one individual. So, it is very important to check it to identify any errors you have made and act on time to correct them. It will also make you feel more prepared when negotiating with your lenders and approaching them. In addition, this will make you sure that no one opened a fraudulent account in your name. (1)
5. Avoid making joint applications
In this scenario, if you have made a joint application with someone who has missed his or her monthly payments, you too will get a lower credit score and reflect on your report as well, so it is not advisable to make a joint application in case you have a bad credit score.
6. Avoid making multiple applications in a short time period
Suppose you apply, for example, for a personal loan, home loan, and a car loan subsequently in a period of a few months. In that case, it will affect your creditworthiness and lower your credit score because it looks like you have a credit-hungry behavior even though you might be unable to pay them back on time.
7. Request for an increase in your credit card limit
You can ask your credit company to increase your credit limit, which will allow you to manage your debt more successfully and will raise your credit score.
8. Pay your bills on time
Paying bills on time is one of the crucial factors when it comes to raising your CIBIL credit score fast, although it might sound simple. It is always necessary to pay bills on time, to have a high credit score. Although sometimes it may be a sacrifice, it is better to give up on other things than to ruin your credit score.
9. Apply for different types of loans
It is always best to choose different lending options and change between secured and unsecured loans, make a mix of taking up different loans such as personal loans and secured loans, or taking long-term and short-term loans. If you take different types of loans and pay them off in a timely manner, it will raise your credit score fast.
How To Increase Your CIBIL Credit Score By 50 Points In A Short Time Period?
Although increasing your credit score by 50 points doesn’t seem to be very exciting, it is a process that requires patience and commitment, and it doesn’t mean that it needs to be a long one.
If you follow the following 5 pieces of advice, you can raise your CIBIL score by 50 points by the end of the year.
1. It is important to have a low credit utilization ratio
What does a credit utilization ratio mean? We can define it as a comparison between your credit limits and current card balances.
The best utilization is considered to be 20 % or even lower. If your credit utilization is higher, you should put some extra cash into your credit card debt to increase your credit card score up in a short period of time.
2. Pay credit cards loans on time
This factor is the most important one as it improves your payment history, and your credit score is rising as the on-time payments rise. So, you can use auto-pay or some reminders that will remind you when you need payments to make.
3. You can use debt consolidation loans and balance transfer credit cards
There are some financial products such as balance transfer credit cards and debt consolidation loans that can lower your card utilization and increase your credit score.
Debt consolidation loans are used for paying off your credit cards, and you will get a loan with a lower interest rate, so it will be easier to pay it off on time.
Balance transfer credit cards offer a low introductory APR, and some even start with a 0% APR so you can pay off your balance before the intro period ends and avoid all the interest rates.
4. Do not apply for new credit or loans
If you apply for a new loan or a credit, it will immediately affect your credit score because when every time you apply for credit, a lender makes an inquiry and checks your credit file, which, in return, lowers your credit score.
Also, if you open a new credit card, it can decrease the age of your credit card, which can moderately affect your credit score.
5. Get rid of all the negative items on your credit report
To start, you can get a credit report from a credit bureau like Equifax, TransUnion, or Experian. Every American citizen is entitled to one free credit report per year from each bureau. When you receive it, you can search for any negative items and if you find an error, you can dispute it with the credit bureau. The negative items you should pay closer attention to are late payments and accounts that have gone to collections.
How To Increase CIBIL Score Immediately From 500 To 750
If you want to increase your CIBIL Score from 500 to 750, you should read the following five tips carefully and apply them as soon as possible to increase your CIBIL score immediately.
1. Take a housing loan
A housing loan, compared to other types of loans, is considered good credit, and it may have a very positive effect on your CIBIL score.
2. Keep your credit cards active
One good thing to do is to charge some small amount on your credit card and pay it off completely before the due date, which is a good signal for the credit bureaus like CIBIL and others that your credit card is active.
3. Use secured credit cards
If you use Platinum cards and other secured credit cards for a few years, it will greatly contribute to your credit score. In addition, paying a bill on time is one of the best ways to increase your CIBIL credit score.
4. Take loans that are considered secured
You can apply for some secured loans, such as car or bike loans, and mix them up with some unsecured ones, such as personal loans. However, if you take too many unsecured loans, it will decrease your credit score.
5. Make frequent checks on your credit history
You should regularly check for any inconsistencies and mistakes in your records, such as updates of your loans. For example, if you have already paid off a debt, it might haven’t been updated on your credit report and this will decrease your credit score greatly.
5 Ways To Help You To Increase Your CIBIL Score From 700 To 75o?
A credit score between 700 and 750 is considered a good score, and your chances to approve for your loans with great interest rates are really big. When you increase your credit score to 750 you can opt for 800, which will put you in the highest bracket of the range, which has the most benefits. So, you can take the following measures that will make a great impact on your credit score:
1. Take long–term loans
When you take long-term loans, your monthly payments are lower and it will be easier for you to pay them off on time.
2. Use older credit cards
The older the credit card is, the more valuable it is, and it means that you are a responsible client. You can also use secured credit cards that are considered more valuable and the bank will take this into consideration when reviewing your application, and it will positively affect your credit score.
3. Repay all of your debt on time
Make a nice habit of paying off all of your debts on time, including your bills. You can use some reminders to help you if you usually forget to pay them when they are due.
4. You can become an authorized user of another account
If you have a family member that is a trusted person and has a good credit score, you can become an authorized user of their account, and this will increase your credit score.
You can discuss this openly with your family member and take into consideration all the bad sides of this step before taking it.
5. Apply for new credit within your limit
You can take a new credit only if you think that you can repay it on time. This way, you will make an impression that you do not need credit continuously and you do not have too much debt. If you have too much debt, it will automatically lower your credit score.
From the moment you open your credit card, you should always make regular checkups on your credit score because having a good credit score will open your way to many financial privileges.
Ana Miller is a creative writer. Her topics of interest and expertise range from psychology to all sorts of disciplines such as science and news.