Every lending institution follows different yardsticks to grant a particular loan. The Reserve Bank of India has ordered that every bank should look into the CIBIL score of every person applying for loan or credit card as a part of mandatory evolution.

What is CIBIL score?

A CIBIL report is a record of one’s previous payments on his/her loans and credit cards. The bank considers your CIBIL score to have an understanding of your past behavioral pattern and present situations to figure out your loan repayment ability and intention in the future.

It is needless to say, a good CIBIL report works in your advantage and that is why it is important to improve the score. CIBIL score ranges from 300 to 900 and a higher score on your credit report always presents your good image to the prospective lenders and helps you obtain favorable deals on loans.

If your CIBIL score is not impressive or you want to make further improvement, here are few steps to adopt.

Eliminate Balances

Keep your spending only to a manageable limit. Make sure to pay off within the billing date. Balances include unpaid dues on your loans. These unpaid dues leave a negative mark on your CIBIL score. Negotiate with your lenders to repay unpaid dues, close the loan account and up your CIBIL score.

Dispute Errors

Review your CIBIL score and if you find any inaccuracy, immediately address it on www.CIBIL.com. You can also dispute in case of any disagreement with any transaction done through the lender. Lenders can do mistakes at the time of entering data.

It is mandatory for the lending institution to rectify the issues within 30 days. Once the errors are corrected, it will automatically leave a positive impact on your CIBIL score. Refrain from applying for another credit until and unless the old issues are resolved.

Maintain all old credit card account

Contrary to the common belief, keeping all old credit card accounts (even if you are not using all of them) is a good idea to improve your CIBIL score and report. If you have successfully managed even one single account, it will positively affect your CIBIL score by lending it longevity.

Pay off EMIs on time

If you are looking for a home loan or car loan, make sure you have cleared your EMIs and credit card bills in time. Timely repayment is one of the crucial factors to have a positive impact on your credit score.

Keep a tab on credit utilization ratio

Never use your credit card for all purposes. Try to maintain a credit utilization ratio of less than 30 percent as it will have a positive impact on your CIBIL score. A low monthly balance makes your CIBIL score healthy.

Raise your credit limit

Requesting your lender to increase your credit limit never means you get the license to cross your means of spending. Such an increase has several plus points if you intelligently manage your credit.

Obtain a secured card

Is your CIBIL score very low? Are you suffering rejection for a low CIBIL score? If it is the case, try to obtain a secured credit card. The leading banking institutions issue a secured credit card to the applicants having a fixed deposit. Timely repayment on balances is enough to give a solid boost to your CIBIL score.

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