CIBIL score ranges from 300 to 900; a score of more than 750 is considered highly creditworthy. Your credit score plays a significant role while applying for a credit card or loans from financial institutions. It determines whether a lender is at risk while providing credits to applicants.
A good credit score is one of the primary aspects that decide an individual’s creditworthiness. Additionally, the CIBIL score also leaves an impact on the rate of interest charged. Thus, an aspirant must know how to increase CIBIL score to earn the extra benefits. Along with that, also learn how your credit score can affect your loan against property eligibility. You must have to possess good cibil score for applying loan.
Learn the Range of CIBIL Score:
Before learning how to increase CIBIL score, know what your score means.
- 800 and above is considered excellent:
A score above 750 is regarded as exceptionally well. Individuals holding such credit score will avail credit without any hassle
- 700 – 799 is termed as a good score:
Candidates with scores lying between 700 and 799 are considered as financially responsible. Such individuals can avail a loan against property or some other credit without any hassle.
- 500 – 699 is known as an average score:
This range suggests that applicants might have to work harder to improve the score. If your score lies within this range, pay your credit bills within the stipulated time frame along with keeping account of the credit mix.
- Below 500 is described as a poor score:
Individuals with a score that is below 500 means they have missed several payments and have failed to make payments within deadlines. Such applicants need to recover from this situation before applying for a loan or some other financial product.
New creditors may not necessarily have such a high credit score even if they have not defaulted on payments. In such cases, these individuals can opt for a loan for low CIBIL score.
Significant aspects of improving your CIBIL score
Keep the following points in mind to learn how to increase CIBIL score –
- Make payments within deadlines – Automate your loan EMI payments through ECS or standing instructions to avoid missing deadlines.
- Check whether the credit report has some errors – Look for mistakes in your credit report and fix it if there is any.
- Maintain your credit mix – Ensure that you have a mix of secured and unsecured loans.
- Pay credit card bills on time – Paying total amount due of your credit card bills within the due date reflects good financial behaviour.
- Avoid joint accounts – In case you open a joint account, your partner’s mistakes or faults would leave an impact on your credit score.
- Secured card – If you apply for a secured card against an FD and repay balances within proper time frames, it will help to improve your score.
- Do not apply for multiple loans at once – Make it a practice to apply for one loan at a time and repay the same. Only after being done with existing credits, avail another. Make sure you qualify for a loan against property by meeting the specific eligibility criteria to avoid application rejection and lowering your CIBIL score.
- Utilize your credits within limits – This is one of the primary aspects you must learn to know how to improve credit score. Avoid spending more than 30% of your credit card limit every month.
- Keep an eye on the tenor – Choose the tenor according to your convenience. Try to choose a more extended period so that you can repay the amount easily without feeling burdened.
Once you have improved your CIBIL score, you can avail financing like loans against property from various reputable financial institutions like Bajaj Finserv with ease. The company provides loans up to Rs. 3.5 Crore with features like balance transfer facility, top-up loan, tenors up to 20 years, etc.
Additionally, they also provide with pre-approved offers to make it simpler and less time-consuming. These offers are valid on several financial products, including home loans, business loans, personal loans, etc. You can have a look at your pre-approved offer by providing with the necessary details.
Make sure you have learnt and understood how to increase CIBIL score. Improving your credit score can help you avail lower rate of interest, longer tenor, and other benefits when availing loans.