Boost your financial well-being with our simple tips for a healthier CIBIL Score. It is easy to take charge of your credit journey when you are supported by the insights and tools provided by the Bajaj Finserv Credit Pass.
Are you struggling to check free CIBIL score then visit our website to know about your credit score. Many people face low credit score challenging circumstances and do not know how to go about improving their scores. Well, the good news is that it is more than possible to boost your score and achieve a credit profile that impresses lenders. What does it take? Like all good things in life, improving your CIBIL Score takes dedicated effort and patience.
Understanding your CIBIL Score
Your CIBIL Score is calculated by TransUnion CIBIL, one of India’s leading credit information companies. Based on information collected from banks and financial institutions you have transacted with, CIBIL generates your credit report, known as the CIBIL Report, which also includes your three-digit CIBIL Score. This number, ranging from 300 to 900, sums up your credit history and indicates how reliable you have been with borrowed funds. As you can imagine, this is a critical number that factors significantly into the decision-making process of lenders when you apply for a credit product. The higher your number is, the easier it is for you to secure credit. In fact, with an ideal score – one that falls within the range of 750–900 – you could even bag lower interest rates, longer tenures, higher credit limits, and many other advantages.
So, what do you do if your score is less-than-ideal? You can follow the practical tips below and boost your CIBIL Score to build a better credit profile.
Actionable tips to improve your CIBIL Score
Pay your bills on time: Being consistently punctual in paying your credit card dues and loan EMIs is the most powerful way to enhance your CIBIL Score. After all, the contributing weightage of your repayment history is a whopping 35% in the calculation of your CIBIL Score. Whereas late payments and defaults damage your score, they are also red flags for lenders, warning them that you are not good with money. So, avoid unnecessary hits to your credit score by paying your dues on time, every time. If this is something you typically struggle with, set up reminders or automate your payments – whatever it takes to honour your monthly obligations and show lenders that you are a reliable borrower.
Keep your credit utilisation in check: Your credit utilisation ratio, expressed in the form of a percentage, refers to how much of your available credit limit you are actually using every month. The ideal credit utilisation ratio is 30% or less. So, if your available credit limit is Rs. 1,00,000, avoid using more than Rs. 30,000. Spending more than that makes you seem credit-hungry and hurts your score. If spending less is not something you can immediately manage, try negotiating with your lenders for a higher credit limit.
Keep old credit accounts open: Even if your very first credit card is lying forgotten somewhere at the back of a neglected drawer, no more than a hazy memory, it is still valuable for your CIBIL Score. The length of your credit history matters as an established track record of responsible credit management goes a long way in fortifying your credit score. So, if you have such old accounts, do not close them, even if you are not always using them. Just maintain them in good standing by using them occasionally and watch how they support your credit health.
Limit new credit applications: It is very tempting to apply for brand-new credit products because many of them come with lots of fun perks. But, did you know, every time you apply for new credit, it triggers a ‘hard enquiry’ into your credit report which temporarily lowers your score. Each one of these remains on your report for a period of around 2 years. Multiple hard enquiries are like warning bells for lenders because they suggest that you are desperate for credit and are either in some sort of financial crisis or living outside your means. Neither of those situations inspires confidence, meaning they will be hesitant to accept your application. So, apply for new credit sparingly and only when you really need it and can handle the subsequent commitments.
Become an authorised user: If a friend or a family member with good credit is willing to support you in your journey to improve your creditworthiness, consider becoming an authorised user on their credit card. While you will not be responsible for paying any bills, their good credit habits will rub off on your CIBIL Score, giving it the much-needed boost. Keep in mind, though, that any negative credit behaviours on their part would also be detrimental to your credit health.
Opt for a credit builder loan: Instead of receiving the loan amount upfront, like in the case of traditional loans, credit builder loans involve lenders setting aside the loan amount and making it available to you at the end of the loan’s term, once you have made all your fixed monthly payments. The lender reports your consistent and timely payments to CIBIL, thereby contributing positively to your CIBIL Score.
Review your credit report regularly: Checking your CIBIL Report regularly is essential – not only to gauge your creditworthiness and pivot as needed, but also to identify any errors that may have crept in. After all, you do not want to pay for someone else’s mistake. So, keep a close eye on your credit report and immediately dispute any discrepancies or mistakes to get them rectified to safeguard your score.
Changes to your credit report will not happen overnight, it might take up to a year for you to notice the improvements from your diligent efforts. Remember to be patient and consistent. And, if you need backup, the Bajaj Finserv Credit Pass has your back. Its personalised dashboard provides a complete overview of all your credit accounts in one place, highlighting the factors that influence it. This includes your upcoming due dates as well as your credit utilisation. Your dashboard also lets you monitor your credit health report in real-time and offers you monthly updates to your CIBIL Score. And if you require more insight to empower your decision-making, the interactive tools help you predict the impact of your choices on your credit health and plan your financial obligations for new credit products before you even apply. Finally, you can enjoy all these benefits – and more – completely free of cost for your first 12 months when you sign up now during the limited-time offer period. So, why wait? Jumpstart your credit journey with the Credit Pass and watch your score go the extra mile.
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