Improving your credit score takes time and consistent effort. By following these tips, you can gradually increase your CIBIL score and improve your chances of accessing credit facilities in the future.
Strategies to increase your CIBIL score
1. Ensure timely repayment Loan EMI
Paying your loan EMIs on time is very important to maintain a good credit score. Non-payment or delay in payment not only attracts a penalty but also has a negative impact on your credit score. Consider setting reminders or using standing instructions (SI) to automate your EMI payments and avoid any delays.
2. Clear Credit Card Pay outstanding balance promptly
Plan strategically to pay your credit card dues by the due date so that your CIBIL score is not negatively affected. Not making payments or not making payments regularly can lower your score significantly. If unable to pay the full amount, at least pay the minimum outstanding amount so that there is no adverse reporting on your credit report,
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3. Review your CIBIL report and correct errors in it
Check your CIBIL report regularly to ensure there are no errors that could impact your credit score. Errors such as incorrect personal information, account details or overdue amounts can be disputed and corrected online through the CIBIL grievance redressal process, potentially increasing your credit score.
4. Limit multiple credit applications
Avoid making multiple credit applications in a short period of time, as each application triggers a hard inquiry on your credit report. Multiple inquiries may indicate financial distress to lenders and lower your credit score. Research and apply to a provider only after careful consideration.
5. Consider a secured credit card
If your credit history is affected by past defaults, consider applying for a secured credit card backed by a fixed deposit. Secured cards can be easy to obtain and using them responsibly by making timely payments can help rebuild your credit score over time.
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6. Maintain old credit card accounts
Keep old credit card accounts open, even if you no longer actively use them. A long credit history and consistent repayment record can positively impact your loan eligibility and support future credit applications.
7. Monitor co-signed or joint loan accounts
If you have co-signed or guaranteed a loan, monitor its repayment status regularly. Any default or delay in payment can impact the credit score of both the borrower and the co-signer. Communicate with the borrower to ensure timely repayment.