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.
CIBIL stands for Credit Information Bureau India Limited and they are 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 has been authorized by the Reserve Bank of India to collect information from various banks, NBFCs, and other lending companies to generate a score.
CIBIL TransUnion’s score ranges from 300 to 900, and anything above 700 is considered a good score. This table below shows the meaning of CIBIL scores -
| CIBIL Score Range | Creditworthiness |
|---|---|
|
750 - 900 |
Excellent |
|
700 - 749 |
Good |
|
650 - 699 |
Fair |
|
600 - 649 |
Needs Improvement |
|
Below 600 |
Immediate Action Needed |
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.
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 -
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.
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.
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.
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.
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, secured, and unsecured loans.
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 all the credit cards you own. Exceeding this limit may make you look credit hungry, and affect your credit score negatively.
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 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.
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.
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 get personal loans from moneyview with a CIBIL score as low as 600. To know more, visit our website or download the moneyview app.
CIBIL scores are updated every 30-45 days, and you can expect your CIBIL score to grow by 100-200 points.
No, you cannot pay money to improve your CIBIL score. You can clear your older dues, and close the loans you had earlier settled. Then you will have to wait for the lender to send information to CIBIL.
What is considered a good CIBIL score depends on the type of loan you are applying for. In general, a score above 700 is considered to be enough for most credit products.
There is no authority other than CIBIL themselves who can alter your CIBIL score. If there is an error in reporting on the part of banks or NBFCs, you can raise a dispute and CIBIL can correct it.
There is no shortcut to increasing your CIBIL score. You will have to start making your monthly payments on time every month, and pay all older dues, to improve your score. To maintain it further, you need to keep using your credit cards and taking loans responsibly.
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