How to Increase CIBIL Score from 300 to 750

A high CIBIL score can increase your chances of securing a loan. To know how to increase your CIBIL score from 300 to 750, read ahead. 

What is the CIBIL Score?

CIBIL stands for Credit Information Bureau India Limited, also known as TransUnion CIBIL. The score generated by them is known as the CIBIL score, and it is the most commonly accepted credit score in India.

The CIBIL collects information from various banks, NBFCs, and other lending companies to generate a score that tells an individual's creditworthiness.

What is a Good CIBIL Score?

CIBIL TransUnion’s score ranges from 300 to 900, and anything above 700 is considered a good score. The table below shows the meaning of CIBIL scores - 

A score of 350 is very low and if you want to know how to increase your CIBIL score from 300 to 750, take a look at the next section.

How to Increase CIBIL Score from 300 to 750?

If you have a score of 350, you need to take immediate action to work on it. Here are some steps you can take to improve your CIBIL score - 

Correct the Errors on Your Credit Report

The first thing that you can do after checking your credit score is to go through your credit report carefully. If you see any enquiries that were not authorized by you, raise a dispute and get them rectified.

Make Timely Payments

Pay your loan EMIs and your credit card bills on time and in full every month. Missing payments affect your credit score negatively. In case you are having a hard time paying your bill in a certain month, consider paying at least the minimum amount by the due date. 

Take Starter Loans

If you are completely new to credit, or your credit score has taken a hit due to unavoidable circumstances, consider taking a small personal loan. The interest rates might be high, but if you continue making the payments on time, you will be able to build your credit score slowly.

Limit Your Loans

Taking too many loans at once, or even making too many hard enquiries during a short period of time may affect your credit score. These enquiries stay on your report for the next 7 years, which will make procuring a loan difficult. 

Diversify Your Credit

To build a good credit score, only taking one type of loan is not enough. Add variety to your credit report responsibly by utilizing credit cards, and secured, and unsecured loans.

Maintain Your Credit Utilization Ratio

Your credit utilization ratio is the ratio of your credit available to the credit utilized, which should ideally be kept under 30%. 

It is calculated by accounting for all the credit cards you own. Exceeding this limit may make you look credit hungry, and affect your credit score negatively.

Don’t Settle Your Loans

If you are unable to pay your dues, the bank may often offer to settle the loan. By making a small one-time payment, your loan is considered settled. But this affects your credit score the most. 

In case you have any old loans that you had settled, contact the lender and pay the dues so it can be closed. 

Plan Your Loans in Advance

Applying for loans irresponsibly may get you in trouble while paying the EMIs. Use an EMI calculator to calculate your EMIs beforehand, and plan your loans in advance. That way you will be able to make timely payments and improve your credit score.

Why Do You Need a Good CIBIL Score?

A good credit score is crucial when trying to procure a loan. Here are the advantages of having a good CIBIL score -

• Proves to the lender that you are a responsible borrower 

• Shows that you pay your dues on time

• Helps you to negotiate a lower interest rate 

• Makes procuring a bigger loan easier

• Improves your chances of getting a longer tenure

• Cuts the process of loan application short by building trust

A CIBIL score of above 700 is considered good enough for most credit products. You can get loans if you have a lower score as well, but having a higher score is always beneficial. A good credit score is an indicator of good financial health. 

It takes time and patience to improve your credit score, but by following the right steps you can do it in no time. Even small steps like paying your EMIs on time, and not exceeding your credit utilization ratio can make a big difference. 

In case you are in need of urgent funds, you can apply for personal loans through Moneyview with a CIBIL score as low as 650. To know more, visit our website or download the Moneyview app.