Credit score tips: 7 ways to improve your CIBIL score

Your CIBIL score plays a critical role in determining whether your credit application gets approved or denied. A high credit score facilitates easier access to credit cards and loans, often at lower interest rates and with additional benefits. Conversely, a low CIBIL score poses significant challenges for individuals seeking urgent credit. Lenders typically reject applications from those with a poor credit score (600 or below), or approve them with higher interest rates.Improving your CIBIL score requires diligent adherence to specific strategies to enhance creditworthiness.
Improving your credit score takes time and consistent effort. By following these, you can gradually enhance your CIBIL score and improve your chances of accessing credit facilities in the future.

1. Ensure timely repayment of loan EMIs
Paying your loan EMIs on time is crucial for maintaining a good credit score. Missing or delaying payments not only incurs penalties but also negatively impacts your credit score. Consider setting reminders or using Standing Instructions (SI) to automate your EMI payments and avoid any delays.
2. Clear credit card dues promptly
Plan strategically to settle your credit card balances by the due date to avoid negative impacts on your CIBIL score. Non-payment or regular defaults can significantly lower your score. If unable to clear the full amount, at least pay the minimum due to prevent adverse reporting on your credit report.
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3. Review and correct errors in your CIBIL report
Regularly check your CIBIL report for any inaccuracies that could be affecting 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 boosting your credit score.
4. Limit multiple credit applications
Avoid making several credit applications within a short period, as each application triggers a hard enquiry on your credit report. Multiple enquiries can signal financial distress to lenders and lower your credit score. Research and apply to only one provider after careful consideration.
5. Consider a secured credit card
If your credit history is impacted by past defaults, consider applying for a secured credit card backed by a fixed deposit. Secured cards can be easier 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 older credit card accounts open, even if you no longer use them actively. Longer credit histories and consistent repayment records can positively influence your creditworthiness and support future credit applications.
7. Monitor co-signed or joint loan accounts
If you've co-signed or guaranteed a loan, monitor its repayment status regularly. Any defaults or delays in payments can affect both the borrower's and co-signer's credit scores. Communicate with the borrower to ensure timely repayments.