Your CIBIL Score is the numeric representation of your credit history. This includes your borrowings and repayment track. A CIBIL score of 750 and above is considered good and increases your creditworthiness, helping you to get a loan on your favourable terms without any hassle. But a CIBIL of less than 700 is considered as low and when you apply for a loan with such a score, it becomes difficult for you to get a loan at your favourable terms. There are even chances that your loan application may get rejected.
But, don’t you worry here are the tips and tricks to improve your credit score in 2021. Implementing this will help you to improve your CIBIL score in a short duration.
Get a Credit Report from TransUnion, Equifax, or Experian
The first step towards improving your credit score begins with checking/knowing your credit score. You can’t work on anything until you get to know that it is wrong or it requires improvement. The same is true with the CIBIL score. You can’t start working on it until you get to know that it needs to be improved. This can be done by getting your credit from the trusted ones. You can get a free credit report from Equifax or TransUnion.
Some online portals also offer credit reports so you can also check with them if you want.
Check for Accuracy
Once you get the report, your next step should be to check it in detail. Make sure that all the information mentioned is correct and accurate.
Even a single mistake in your CIBIL report can lead to a negative impact on your CIBIL score. Hence be careful and check for the details.
In case you find some negative information, you can write a letter to CIBIL or Transunion, showing the proof of the wrong information mentioned in your report. CIBIL and Transunion will then send a notice to your bank to provide correct information and thus your CIBIL score and report will be corrected/updated shortly.
In the case where your CIBIL is low and, the Report contains no Error,
In such a case, you should immediately start working to improve your CIBIL.
The steps to improve CIBIL includes-
Take a new personal loan or a new credit card
If your Credit Score is not good or hasn’t changed much for a long, it’s because there has been nothing to be reported in your CIBIL. So to improve your portfolio it is important to have something which needs to be tracked and reported. This can be done by taking a Credit Card or a small amount of personal loan. Once you take the credit card or a personal loan you start adding to your CIBIL report.
Make sure that you pay the EMIs of your loan on time, and if it is a credit card try to clear its bill timely/monthly. To make it more convenient it will be easier to do with a credit card as the expenditures through your card depend on you. So, use as low as possible and clear that bill at the start of the month.
Pay more than the minimum due amount
In case, when you are not able to clear the entire bill of your credit card, try to pay more than the minimum amount due. Doing this will make you debt-free in very less time. Along with this, it will add more points to your CIBIL report too.
Don’t apply for credit again & again if already rejected
Whenever you apply for a loan, lenders enquire about your CIBIL score to know your creditworthiness. Suppose your loan application gets rejected by 2 lenders and you kept on applying for the loan with other lenders. In this case, so many tough inquiries can also hurt your CIBIL.
So, whenever you plan to take a loan in the near future, the first important thing which you need to do is check your credit score. In case you find it low, take the above-mentioned steps to improve it.
And if your loan application has been already rejected because of Low CIBIL, then you should wait for a while to get your CIBIL improved before you apply again.
Remember, nothing impacts your credit score faster or more effective than paying bills on time and using your credit cards judiciously.
(Updates on 03-12-2020)