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16 February 2018, 12:59   Report Abuse

Anvi Sharma

[ Scorecard : 80]

Many of you will surely agree on the fact that a bad cibil score can be a nightmare for those who have an urgent need of money to meet their various needs such as medical emergencies, debt repayment and so on. And, in order to fulfill these needs, availing a loan is a smart option, don’t you think so? Now when it comes to availing a loan, there are plenty of ways to get it and the criteria of the same is solely based on the size of the loan.


However, one thing that needs to be mentioned here is the fact that it is compulsory for all the lenders to check credit score of an applicant before offering any sort of loan or credit card product.


According to Reserve Bank of India (RBI), it is a mandatory guideline to establish the creditworthiness of the individuals. Therefore, if a person is having a low/poor score, it simply indicates that he/she is not creditworthy enough to get a loan/credit card from conventional sources due to their past actions. But nothing to worry because with some efforts an individual can improve his/her score and can become creditworthy again. So, without taking too much of your time, let’s just get to the topic straight.


Read the article below to know some effective tips to improve your credit/cibil score


Do Not Delay or Miss Any Payments:


There is no denying the fact that the repayment behaviour of an individual plays an important role in the credit score calculations. Did you know your track record of loan and credit card payments can make up almost one- third of your overall score. So, even a single late payment or due in payment can create an adverse effect on your score. Many people without even realizing the same delay or skip their payments completely,thus end up having a low/poor score. SO, in order to avoid such a situation start paying all your dues/bills in a timely manner to see an immediate effect on your score.


Follow the Rule of Credit Limit Utilization:


One of the most effective ways to get your score on right track is to avoid the full utilization of your credit card limit. Keep the 50% rule in mind, however, in extreme cases don’t go more than 30% of your credit limit. For example-if you are having a limit of Rs.1,00,000 in a month, make sure you do not exceed beyond Rs.50,000. Well, using more than 50% or 30% of your limit signifies that you are not disciplined with your spending habits. And, you might not able to repay your debt obligations easily, which causes your score to drop.


Avoid Multiple Loan/Credit Applications in a Short Time Span:


Too many loan/credit card enquiries in a short span of time is not a positive sign for your score. Just imagine, what does it looks like to a lender, if you have made too many credit card, home loan or personal loan enquiries within few months. Well, looks like you are credit hungry and are interested in multiple sources to get the credit. So, there’s one way to put a full stop on this! Simply avoid making several loan/credit card enquiries within a short time-frame.


Don’t Check Your Score Too Often:


Did you know if you check your cibil score frequently, it actually lowers your score further? Yes, you read that right! If you check cibil score online often can damage your existing credit profile, resulting in a lower score. Though, it is a good habit to check your score as it gives you an edge while applying for any sort of loan/credit card in the future. But make sure that you do not check the same on a frequent basis as doing so will badly affect your score.


In a nutshell, if you seriously want to improve your credit score, all you need is some patience, commitment and self-discipline to achieve your goal.

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