How to improve CIBIL Score? Know 5 smart ways to boost your score

It is important to maintain and improve CIBIL Score because of the crucial role it plays in ensuring that you get quick, easy, and affordable access to credit. Your CIBIL Score reflects your credit behaviour and financial discipline, making it an important consideration for lenders.

Lenders check CIBIL Score while assessing your credit application and offer credit, such as loans or credit cards. This credit score ranges between 300-900 and a score above 750 indicates that you can handle credit responsibly and carry a low risk of default. This means you get faster approval on loan applications, get larger or desired loan amounts, and enjoy more nominal interest rates.

One of the easiest ways to check CIBIL Score is on Bajaj Finserv. With just a few clicks, you can get results in just 2 minutes absolutely free of cost. This allows you to monitor your credit score at any time and take steps to improve it and secure your future financial wellbeing.

Given its importance in determining your creditworthiness, take proactive steps to improve CIBIL Score. Here are 6 smart and easy tips to improve CIBIL Score and get new credit on budget-friendly terms.

Manage your joint accounts carefully

When you share a bank account with someone, their financial actions reflect on your creditworthiness and yours reflect on theirs. As a result, it is extremely vital that you have a joint with someone who is financially responsible and has a lower chance of negatively impacting your creditworthiness. If you have a joint account with someone who has a poor CIBIL Score, the best way you can protect and improve CIBIL Score is to close the account and make timely repayments. However, you need to keep in mind that along with this, you will need to take other measures and be patient.

Repay credit when it is due

Your repayment history is one of the most important ways to improve CIBIL Score. When you pay your EMIs or credit card bills on time and in full, without settling, it shows that you are disciplined and responsible and boosts your credit score. You can set reminders for payment deadlines or set standing instructions online to ensure that you do not miss a payment and have sufficient funds to make the full payment.

Be prudent in utilising credit

Your credit utilisation ratio is another aspect that you should look at to improve CIBIL Score. As a rule of thumb, you should try not use more than 30% of your total credit limit in a month.

If you find yourself going above this limit constantly, you should consider increasing your total credit limit. However, you should opt for this option only if you absolutely need it. Prior to this, you can try repaying any existing debt before availing new credit to keep your utilisation ratio in chec

Have a healthy mix of credit experience

Credit may be secured or unsecured. Secured loans require you to put your asset up as collateral. Unsecured credit is when you avail a loan without any security. A mix of these types of credit in your history shows that you have the experience and discipline to handle both and thus increases your credit score.

Check CIBIL Score and report to fix errors

Your efforts to improve CIBIL Score only bear fruit if you address the aspect that needs improvement. This is easy to do when you check CIBIL Score on a regular basis. This gives you better insights into what you need to do as such reducing your credit utilisation or paying EMIs on time.

Moreover, when you check CIBIL Score and the credit report that accompanies it, you can identify and resolve any errors that can tank your credit score. For instance, this could be a loan account that shows you have unpaid dues when you have repaid it in full. Doing this is important to make sure that there is no irreversible damage to your credit health.