The Credit Information Bureau India Limited, often referred to as CIBIL, provides credit scores that are crucial when you’re applying for a loan. Before banks process your loan application, they review your CIBIL score, which ranges from 300 to 900. A score closer to 900 is ideal when seeking loan approval.
Understanding how your credit score is calculated is essential. Your CIBIL report is a record of all your credit cards and past loans, including your repayment history. This information helps banks assess your financial discipline and predicts your likelihood of repaying future loans, based on your current financial activities.
It’s important to settle outstanding credit card dues, as they can negatively impact your CIBIL score. Paying off your credit card balances before the due date not only helps improve your score but also demonstrates strong financial discipline to lenders.
If you find errors in your credit report, you should address them promptly on the CIBIL website. Mistakes can occur due to data entry errors by lenders or software glitches. Correcting these errors can boost your credit score automatically. Wait to apply for new credit until all previous debts are cleared to ensure a clean start.
Keep using your oldest credit card, even if it’s inactive, as it contributes to a positive credit history. A long-standing credit account with timely payments enhances your creditworthiness and boosts your CIBIL score.
When making significant purchases, such as a car or property, it’s important to pay your EMIs on time. Consistently doing so helps build a strong repayment track record and improves your CIBIL score.
If your CIBIL score is low, consider getting a secured credit card against a fixed deposit from reputable banks like Axis Bank, SBI, ICICI Bank, or Kotak Mahindra Bank. Timely repayments on this card can gradually boost your score.
Peer-to-peer lending platforms, like Lendbox, are an innovative way to improve your CIBIL score. While not widely known, these platforms offer benefits, especially if you have a poor credit history. Lendbox allows you to borrow small-term loans without prepayment charges, and repaying these loans on time can enhance your score.
Maintaining a high CIBIL score is beneficial for securing loans easily. Timely repayments ensure you avoid unnecessary stress.
