Home Credit score 5 easy ways to boost your CIBIL score and get ready for credit this year

5 easy ways to boost your CIBIL score and get ready for credit this year

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Lenders and rating agencies often offer a free credit check or CIBIL score. Free services like these make it easy to monitor changes in your credit score and make the right decisions to strengthen your credit profile, especially if you plan to rely on credit for your future goals. To improve your credit score and thus your creditworthiness, you need to understand what factors contribute to it. Credit rating agencies calculate your score based on various factors such as your repayment history, credit dependence, and exposure to different types of credit.

Your credit score is how lenders and credit card issuers understand your financial situation and assess whether or not you’re likely to repay credit on time. Generally, a CIBIL score closer to 900 allows you to easily obtain new affordable credit. For example, it is more difficult and may be more expensive for you to obtain a personal loan for a CIBIL score of 550 compared to a score of 750 or more. To easily get affordable credit, maintaining a credit score above 750 is a smart way to go. Here are some tips that can boost your credit rating and qualify you for great offers.

Reimburse contributions when due

Missing your credit card bill payments or loan EMIs can lower your credit score. The best way to meet repayment deadlines is to plan your loan and credit card payments carefully before you spend. By developing a budget, you can ensure that you have the necessary funds to meet your credit obligations in a timely manner. Remember that paying only the minimum dues on your credit card is also not good for your credit profile. Always pay your credit card bills in full. In case you have too much debt, you can also consolidate your loans and repay a single loan to increase your credit score.

Have experience with a good credit mix

Have you only taken out unsecured loans in your lifetime as a borrower? This is another reason for a low credit score. You can improve this by taking out a secured loan such as a two-wheeler or car loan. Knowing the different types of loans not only gives you credit experience, but also helps boost your CIBIL score. Since most secured loans come with a longer repayment window and most unsecured loans come with a shorter window, you can easily manage repayment with smart planning.

Track your credit usage

Credit usage refers to the extent to which you rely on credit in your daily life. Your credit utilization rate is calculated by dividing the total amount of credit you are currently using through credit cards by the total credit limit. A low ratio means that you have used your credit card wisely and are not greedy for credit. When you use your credit cards up to their limit each month, your credit utilization rate increases. This is a red flag and drops your CIBIL score as it shows that you may be too dependent on credit. It’s best to keep your credit utilization rate at 30% to improve your credit score.

Guarantee an error-free credit file

Your credit report contains details about your profile, such as your credit history, personal information, and account information, and is the basis on which your credit score is calculated. Checking your credit score and report regularly is the best way to keep an eye on these factors. Sometimes your score may be low due to an error in your report. This may be due to a lender not closing your repaid loan account or credit card fraud. By noticing these mistakes and raising a dispute to correct the discrepancies, you can boost your credit score.

Remember that establishing the ideal credit score takes time. By adopting the habits mentioned above on a regular and disciplined basis, you can boost your credit score. To conduct a CIBIL score check, free services are available on the official website only once a year. This may not be ideal, as you may want to check your score and report it more often.

Apart from using the official website for a CIBIL score check, free credit score check services are also made available by some lenders. Bajaj Finserv, among the best NBFC in India, offers you CIBIL score check for free at your convenience. Check the CIBIL score today and take the right steps to improve your creditworthiness so you can be ready this year.