One common requirment across all lending companies is the need for a good CIBIL score. While some borrowers effortlessly maintain a score of 750 and above, others struggle to move past 600.
In this article, let’s dive into all the ways you can improve your score from 600 to 750.
CIBIL, one of the major credit bureaus in India, considers several credit parameters to aptly assign each borrowing individual with a credit/CIBIL score. This score is a critical deciding factor in your loan approval process.
CIBIL score is crucial in today's economy. Although the CIBIL score ranges from 300 to 900, only scores 750 and above are considered creditworthy. Moreover, lenders perceive individuals with higher scores as reliable and offer loans with lower interest rates or on flexible terms.
For this reason, borrowers look to improve their CIBIL scores and better their chances of securing a loan.
You can improve your CIBIL score from 600 to 750 by following the methods below.
Let us look at each method in detail.
Loan repayment is a high-impact parameter. At the end of each cycle, pay off the whole amount due to ensure your credit score doesn’t slip. Don’t make the mistake of paying only the minimum balance due or a part of the EMI, since it negatively affects your score.
Similarly, making timely repayments improves your score significantly, making it easier for you to reach your goal of 750.
The credit utilization ratio stands for the percentage of credit you utilize out of the credit limit set by the lender. The credit utilization must not exceed 30% of the credit limit. The lower your credit utilization ratio, the higher your credit score.
Multiple loans mean multiple EMIs and less spending freedom for the borrower. It also portrays you as a financially inept individual. Additionally, every time you seek new credit, a hard inquiry is conducted to assess your credit profile. These hard inquiries will cause you to several credit points, leading to low credit scores.
Hence avoid taking too many loans to keep your credit score stable.
To improve your credit score to 750, you must plan your borrowings wisely. A healthy credit mix of secured loans and unsecured loans with varying tenures will give you breathing space while paying off your EMIs, as well as reflect well on your credit profile.
A lengthy credit history is an asset for your credit score. It gives credit bureaus enough information about your credit behavior. If you possess old credit cards that you no longer use, keep the cards open.
When you close old credit, the length of your credit history decreases, and your credit utilization ratio increases. Your unused credit cards can help you maintain good credit scores with ease.
A good credit history leads to a higher credit score, and eventually a loan on your terms.
In case there are red flags on your credit report, you can work towards building good credit and gradually push the negative remarks out of your credit report. It will take years and financial discipline to free your report from the bad history.
One reason for your low credit score could be the possibility of errors in your credit report. Make it a habit to check your credit report every few months to ensure it is up-to-date and accurate.
If you find misleading information or missing credit data, raise a CIBIL dispute. Once the error is rectified, you will notice a change in your credit score.
A CIBIL score of 750 and above benefits you in a lot of ways, including
Know Your Credit Health Instantly
A higher CIBIL score always works in favor of the borrower. Since CIBIL score is essential while applying for any form of credit, it is the borrower’s responsibility to maintain a credit-worthy score. A disciplined financial life and good credit habits will help you increase your CIBIL score from 600 to 750 gradually.
Can I Increase My CIBIL Score From 600 to 750 Immediately?
It is not possible to increase your credit score to 750 immediately. It takes several months, and sometimes years to get there.
Is 600 a Bad CIBIL score?
Lenders consider any credit score below 650 as a bad score. However, there are few lenders who extend loans even to individuals with a credit score of 600. These loans come with higher interest rates and more restrictions.
How Can I Raise My Credit Score By 200 Points in 30 Days?
You can’t raise your CIBIL score by 200 points in just 30 days. You can, however, increase it significantly by following financial discipline and paying your bills on time.
Should I Close My Unused Credit Cards?
No. Even if you don't use your credit cards, try to keep them active. The credit limit of these cards and their credit usage ratio help you keep your credit score stable.
Which Loans Can I Avail With A CIBIL Score Of 750?
A CIBIL score of 750 allows you to be eligible for several loans, from personal to car loans. However, even with a score of 750, you might get rejected by the lender if you fail to meet their requirements.
Credit Score Article
Was this information useful?
