7 Ways To Increase Your CIBIL Score From 600 to 750

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.

Let us look at each method in detail.

Repaying on time

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.

Keeping a low credit utilization ratio

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.

Avoiding multiple loans/inquiries

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.

Balancing secured & unsecured loans

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.

Holding old credit open

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.

Maintaining a good credit history

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.

Checking your credit report often

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. 

Importance of Improving Your Score To 750

A CIBIL score of 750 and above benefits you in a lot of ways, including

• Faster loan approval
• Several lenders to choose from
• Prospect of overdraft loans if necessary
• Freedom to negotiate the terms of the loan 
• Possibility of lower interest rates or longer tenures
• Discounts or offers regarding processing fees or other charges

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.