5 tips on how to increase CIBIL score

Jan 28, 2021

Most of us contemplating availing a loan would have come across the term ‘CIBIL score’ or credit score and about the importance of credit score. A CIBIL score or credit score is a rating given to you by credit bureaus that assess your creditworthiness. This score is given based on various factors like transaction summary, loan repayment history and credit mix. A CIBIL score is the first and foremost factor that lenders look at before granting you a loan as it defines your ability to repay the borrowed amount. Most institutions don’t offer loan for bad CIBIL score and this can prove detrimental to your emergency cash needs. Here are few tips how to increase CIBIL score

Importance of credit score

Indian CIBIL score ranges from 300 to 900 and anywhere above 750 is considered a good CIBIL score. However, for people with a CIBIL score below 500 it is difficult to avail personal or business loans as the Reserve Bank of India mandates that every lending institution checks for a good CIBIL score before granting loans to applicants. Hence, the importance of credit score as it could either make or break your borrowing purpose.

Keep track of your payments due

Be it your EMI or credit card bill make sure to keep a religious track of payment due dates. Paying your EMIs late or defaulted payment will not only attract a penalty but will also reflect poorly on your credit score. Setting a reminder on your phone calendar to make payments on time is step one towards how to increase CIBIL score. Though there are a few lenders who offer personal loan for bad CIBIL score, there are a high number of chances your application will get rejected.  

Check CIBIL score and credit report

The Indian CIBIL score rating is given by four main credit bureaus called CIBIL, Equifax, HighMark, Experian and CIBIL. This can be found in the credit report. It is advisable to check your credit report regularly as it can be used to see all your defaulted payments or where your credit score has been dragged down. Checking your credit report is a good habit as it may contain errors or wrong information about delayed and defaulted payments calculated by the lenders. By auditing the report you can reach out to the banks and credit bureaus to get it corrected. Get free CIBIL score on www.cibil.com

Avoid taking too many loans at the same time

The best and most easiest tip on how to increase CIBIL score is to avoid taking multiple huge loans at the same time. Paying EMI and interest every month and while taking care of monthly home expenses itself is a huge task. Doing the same for several borrowed loans at the same time is a burden you can’t manage and is a huge negative factor for your CIBIL score as it portrays inefficiency to close one loan and borrow. It also shows that you are lacking funds which will negatively affect your credit score, deterring the lenders from giving you a loan. It is better to repay and close one loan completely before getting another.

Get longer loan tenures

It is easier to repay the loan when you opt for a longer tenure as the EMI amount will be less and manageable each month. This will result in you not skipping your EMI, completing your payments on time and closing the loan comfortably. This is a very easy and doable tip on how to increase CIBIL score which will boost your overall credit report. You can check CIBIL score and your credit report on several sites online.

Maintain your old credit cards

It is common to see many people pull out 3, 4 different credit cards and swiping it for their expenses. This is exactly the kind of habit that will make getting a good CIBIL score impossible. It is important to maintain old credit cards and continue to use the same ones as long as you can pay off the credit card bills on time. Maintaining 1 or 2 credit cards is also easier to track payments and pay the bills on time. Also, remember not to delete the paid off loans from the credit report as these are ‘good debts’ which helps build a stronger credit history and in turn boosts your CIBIL score. Moreover, it is also difficult to get a new credit card for low CIBIL score.

How to get financial credit with a bad CIBIL score

We saw some tips on how to increase CIBIL score, however it is a slow and consistent process to build a strong credit report. However, this might hinder any of your plans or urgent personal needs that require funds. Most lenders offering personal loans require a CIBIL score of at least 600-700 above since they are unsecured loans and rely heavily on the customer’s credit history for loan approval. With strict RBI guidelines in place it is rare to get an instant loan, home loan, car loan or personal loan with bad CIBIL score. You will not be able to avail even a small business loan without a good CIBIL score. A viable and affordable option to use in tough situations like this is to avail gold loans which gives you the much needed credit even without a perfect CIBIL score. Though taking a gold loan sounds like an unconventional form of credit, it is one of the most popular type of loans availed.

Using gold jewellery to get credit  

Gold loans are secured loans which means gold jewellery is pledged as security for the loan amount borrowed. Since there is a collateral submitted as surety equivalent to the loan amount given, the lender is at more liberty to grant loans for people irrespective of their CIBIL score. It is a low risk loan as the lender need not be worried about the loan being repaid. On the account of failure to close the loan, the gold jewellery pledged by the borrower will be auctioned off by the lender.

You can avail instant and affordable gold loans at Rupeek which is an RBI certified gold loan company. There are several attractive reasons to take a gold loan at Rupeek if you have a below par credit score.

  • Minimal documentation required.
  • Gold loan calculator to help assess EMI for loan amount needed
  • CIBIL score and credit history is not scrutinized much
  • Cheap loans with interest rates starting at just 0.79%
  • Flexible repayment and loan tenure options
  • Maximum customer support and guidance in loan closure

Irrespective of your CIBIL score, you can avail gold loans by pledging your jewellery in just 30 minutes without stepping out of your home. You can experience the complete online loan process with Rupeek and get the financial assistance needed for your personal needs.

Apply for

Instant Gold Loan

in 30 Minutes Guaranteed

Please provide a valid phone number

thankyou

Your Loan Request Successfully

Your request has been received, Our customer relationship manager has Been notified and call you shortly.