10 Ways To Improve Your CIBIL Score

CIBIL is a credit information company that maintains records of all credit-related activities. Here are 10 ways to improve score

1. Pay All Of Your Bills And EMIs On Time

Late payments can have a significant negative impact on your CIBIL score. Make sure that you pay all your bills, including credit card bills, loans, and utility bills on time to ensure that your credit score is not affected negatively.

2. Regulate Your Credit Utilisation

Credit utilisation refers to the amount of credit you are using compared to your total credit limit. As a general rule, using a short portion of your total credit score, ideally below 30% of your total limit can help improve your credit score.

3. Keep A Check On Your Credit Report

It is a good practice to review your credit report periodically to check for errors or discrepancies that might be affecting your CIBIL score. If you notice any errors or mistakes like paid-up loans showing up as unpaid, contact the responsible agency/financial service and get it rectified.

4. Keep Old Credit Cards Operational

The length of your credit history is an important factor in determining your credit score. Keeping old credit cards active and paid-up open will help increase the length of your credit history and thereby improve your CIBIL score.

5. Avoid Taking Too Many Loans Or Multiple Credit Cards

Every time you apply for a loan or credit card, it shows up as a hard inquiry on your credit report, which can have a negative impact on your credit score. Ideally, you should not have more than a couple of credit cards that you pay off regularly.

6. Diversify Your Credit

Another good practice is having a diverse mix of different types of credit, such as a credit card, a personal loan, and a home loan. Having a wide variety of credit that is being paid up on time can help you improve your CIBIL score.

7. Be Careful Of Opening Joint Accounts

If you have a joint account with someone, ensure that the other person's credit history is good, as it will also directly affect your credit score. As a general rule, avoid having joint accounts unless it’s absolutely necessary, like for family needs.

8. Pay Off Your Pending Credit Card Debts On Priority

Outstanding credit card debt can destroy your CIBIL score, not to mention the high rates of interest will only increase your debt over time if left unpaid. So make sure that you prioritise paying off your credit card debt whenever possible and ensure you pay off your credit card bills on time in the future.

9. Consider Opting For A Secured Credit Card

If you have not applied for loans or credit cards before, or if you have a poor credit history, getting a secured credit card can help you build or rebuild your CIBIL score over time.

10. Consult A Financial Planner 

If you continue to have a bad CIBIL score for a long time, the best idea would be to consult with a professional financial planner. They can help you in figuring out the exact steps to take to recover your credit score over time. Remember that it will take some time to rebuild your CIBIL score, so ensure that you keep consistently paying off bills and debts on time.

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