5 easy ways to boost your Cibil score and its benefits
Your Cibil score is your credit health report card that shows your creditworthiness. Lenders judge your creditworthiness according to your Cibil score. A high Cibil score helps you get loans on favourable conditions and a credit card with a high limit. The Cibil score is categorised as- 300-500 (poor), 550-650 (average), 650-750 (good). TransUnion is one of the four bureaus that report the Cibil score of an individual. Know how you can boost your Cibil score and what are the advantages of it.
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Create credit history
If you haven't borrowed money in the form of loan or a credit card, you won't have a Cibil score. To create your credit history, you can borrow a mix of credit, secured and unsecured loans, and pay your bills on time. Even if the borrowed money is a small amount, it will help you create your Cibil score, which may help you get credit facility in the future.
Do not take many loans at a time
The strategy should be to take one loan at a time. When you take more than one loan at one time, lenders think that you are always in need of money which may affect your repayment capacity.
Check your Cibil report to rectify mistakes
Sometimes the credit bureau sends wrong information to you lender or delay updating your payment records. It affects your Cibil score. If you find discrepancies in your Cibil score, write to the bureau to rectify those mistakes.
Go for a long-term loan
When you go for a long-term loan, your EMI is lower than when you go for a shorter one. If your EMI is low, you can pay it easily and have lower chances of missing out on it and inviting penalty. Disciplined payment of loan will boost your Cibil score.
Not using credit card
When you don't use a credit card for long, the lender many consider it inactive and close your account. It will increase you credit utilisation ratio, which should not be more than 30% of your credit limit for a healthy Cibil score.
Benefits of high Cibil score
A healthy Cibil score gives you faster credit approvals, higher credit limits, fast loan approval, low interest rate loan, high loan limits, multiple loans, a pre-approved credit card, etc.