Improve a Bad Credit score Quickly: This Top Ways to Improve Your CIBIL Score up to 900

CollegeUnified By CollegeUnified 10 Min Read
Improve a Bad Credit score Quickly

How to improve CIBIL Score: In today’s fast-changing world, financial stability and reliability have become very important. Taking loans for financial transactions such as credit cards, personal loans, and large purchases has become a common practice. But, before taking the credit, your CIBIL score is checked by financial institutions and banks. This is an important process that checks your financial credibility. So, let us know how to improve CIBIL Score and what is its importance.

CIBIL Score kaise badhaye

CIBIL Score is a summation of information on an individual’s financial establishments. This is a control index that is considered proof of your financial stability and reliability. It is provided by the Financial Bureau, which helps lending institutions and financial institutions verify the creditworthiness of individuals.

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Improve a Bad Credit score Quickly
Improve a Bad Credit score Quickly

CIBIL Score Calculation

CIBIL Score is calculated based on a variety of financial factors. Personal loans are calculated numerically based on the mode of payment, credit card usage, loan or credit applied for, maximum credit limit utilized, etc. Generally, the value of the CIBIL score ranges from 300 to 900, with a higher score indicating credibility. How to get CIBIL Score

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Importance of CIBIL Score

Having a good CIBIL Score is very important from your financial point of view. When you apply for a loan or credit, your CIBIL score helps financial institutions and banks to check your creditworthiness. If you have a good CIBIL score, it saves you financial time and money. You also get a reasonable interest rate and priority for maximum repayment.

Benefits of Having a Good CIBIL Score

Easy approval of loans and credits: Based on the CIBIL score, banks, and financial institutions approve your loan and credit applications.

  • 1. Having a  Good CIBIL Score gives you easy approval for your popular purchases like home, car, or personal loan
  •  2. Better Interest Rate: Based on CIBIL Score, you get a fair interest rate for the highest repayment. With a higher CIBIL score, you can be offered the maximum interest rate by banks, helping you avoid the cycle of debt. 
  • 3. Credibility and becoming trustworthy: Your credibility is built on the basis of CIBIL score and financial institutions and banks have faith in you. This ensures the maximum selection of financial options for you. 
  • 4. Loan Tenure Extension: A good CIBIL score can help you get loan tenure extensions from banks. This gives you a chance to access the loan for a longer period and enables you to meet your financial goals with ease. 5. Representation of Financial Worth: Good CIBIL score renders your financial worthiness and helps in providing you with optimum financial support and facilities. How to get CIBIL Score

Steps to Improve CIBIL Score

If your CIBIL Score is low then don’t worry, can improve it. You can improve  your CIBIL Score by following some suitable measures :

1. Pay off loans on time: Paying off your loans on time improves your CIBIL Score. Try to pay the loan regularly by making a payment schedule as per your requirement. 

2. Conscious use of credit cards: Using credit cards in the right way improves your CIBIL score. By not exceeding the maximum credit limit, making regular bill payments, and paying at a reasonable interest rate, your CIBIL score improves. 

3. Check Credit Report: It is important to check your credit report at regular intervals. With this, you can understand your financial position and find out the problems with  CIBIL Score.

4. Pay off your loan on time: If you have extra money, try to pay off your loan as early as possible. Your CIBIL score is likely to improve and you get financial freedom. 

5. Close credibility and keep the loan disciplined: Keep in mind that financial institutions and banks make a lot of difference to your credibility. Repaying your respective loans on time, paying bills on time, and using credit cards in the right way gives you credibility. 

CIBIL Score is the guide to your financial future, so check your CIBIL Score regularly and take the necessary steps to meet your financial goals. A good CIBIL score empowers you with maximum options in financial resources and gives you a chance to own a dream home or fulfill other financial goals.

Difference between CIBIL Score and Credit Rating:

Often people consider CIBIL Score and Credit Rating to be the same thing, but they are two different things. CIBIL Score is a numerical assessment that ranges from 300 to 900, while Credit Rating is often an alphabetic notation (eg A, B, C) and is assigned differently by different credit bureaus. Both of these help in checking your financial status, but they are calculated in different ways.

The basis behind CIBIL Score: 

The CIBIL Score is determined based on select details representing the credit history. This includes personal loans, credit cards, bill payments, and other financial transactions. The CIBIL score is determined for the last 6 months to 2 years of your credit history. The CIBIL score may change based on your financial actions, which include factors such as the timeliness of your payments, utilization of maximum credit limit, repayment methods for personal loans, fresh loans, or credit applications. How to get CIBIL Score

The basis behind Credit Rating: 

Credit rating is prepared on the basis of your financial resources, bank accounts, income, expenses, debts, bill payments, assets, and other financial details. It is calculated in an analytical manner and represents your financial position in an often alphabetic notation (eg A, B, C). This reflects your credit rating credibility and is important for your financial independence.

To have a good CIBIL score and credit rating at any given point in time, it is important to make your payments on time, pay bills on time, make proper use of credit limits, and control financial actions carefully. If you take care of these things, your CIBIL Score and Credit Rating will automatically improve and help you towards financial prosperity. How to get CIBIL Score.

How is CIBIL Score calculated?

CIBIL Score is calculated according to your credit behavior, for example, how many banks or NBFCs have you approached for loans in the past? Are you able to make your current loan or credit card monthly payments on time? Or how much money are you paying to loan and credit card companies against your annual income? Keeping all these factors in mind, your creditworthiness is checked after taking the loan. For your ease, we have listed down the main factors that affect CIBIL Score. How to get CIBIL Score

1. Number of Loan/Credit applications 

2. Track record of EMI payments and credit card payments 

3. What are the types of current loans? What is the percentage of Unsecured & Secured Loan? 

4. Credit utilization – that is, what part of the income is going towards installment payment 

5. Is there any payment default or recovery going on? 

The combined score of all these is calculated by a computer algorithm to give a 3-digit score ranging from 300 to 900. This 3-digit score is considered your CIBIL / credit score. The higher the score, the better your credit profile, and the lower the score, the more credit risk is associated with your profile.

CIBIL SCORECARD

CIBIL Score  Creditworthiness  Approval Probability
600-649  Doubtful  Difficult
650-699  Satisfactory or fair  Possible
700-749  Good  Good
750-900  Excellent  Very high
How to get CIBIL Score

Take care about CIBIL Score 

If you have not checked your CIBIL Score yet, then you should do so quickly. Based on the CIBIL score, you can get more benefits during financial transactions and you can improve your financial condition further. If your score is getting low due to any reason, you can improve it by adopting appropriate measures. Having a good CIBIL score saves your finances time and money and makes you trustworthy to the relevant institutions.