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Is Your Loan Refused? Top 20 Ways to Raise Your CIBIL Score for a Loan

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Is Your Loan Refused? Top 20 Ways to Raise Your CIBIL Score for a Loan

Praveen Sharma
Monday, January 21, 2019

You require a loan but have a low CIBIL score? For loan approval, you must have a thorough understanding of all components of CIBIL scores. Since the Reserve Bank of India (RBI) ordered that all banks examine CIBIL scores and analyse the creditworthiness of loan, credit card, and other types of credit applicants, this has become critical. Continue reading to learn how to check cibil scorefor free.

A minimum CIBIL score of 750 is required for loan or credit card acceptance. In general, scores have been seen to vary between 300 and 900. Elite scores are defined as those that exceed the level of 800.

Continue reading for a free Cibil score check

What exactly is CIBIL?

Credit Information Bureau India Limited, or CIBIL, is the frontrunner as a Credit Information Company established with the intention of collecting and maintaining financial records of individuals or businesses in matters of loan repayment or any other type of credit borrowed from a lending institution.

Top 20 Ways to Improve Your Credit Score

The subject of how to boost credit score is one that has been occupying many people's minds. The first step in improving or boosting your CIBIL score is to obtain a report on your CIBIL score. If you register with many online financial marketplace websites and some institutions, you can get free CIBIL reports. On payment of minor costs, several banks receive CIBIL reports. CIBIL reports can be prepared promptly online by providing certain information.

Then, depending on the areas that require improvement, the relevant procedures must be taken. The following are the most efficient methods for improving your CIBIL score:

  • Pay your credit card minimum dues and loan EMIs on time. It is recommended that you use ECS (Electronic Clearance Service), which assures that your money is credited on time. For EMI payments, stay away from post-dated checks.
  • Pay off all delinquent and past-due loan and credit card debt. Negotiate with creditors and banks to settle these past-due balances. Pay by the agreed-upon deadline and obtain a clearing letter from the bank/creditor once these balances have been settled.
  • Keep your debt-to-income ratio low. This will improve your repayment capacity and provide you a higher CIBIL score. When applying for loans, choose a longer repayment time to boost your repayment capacity.
  • CIBIL officials may receive false information from banks on occasion. Such reports should be challenged, and your records should be updated.
  • Maintain a good credit card credit use ratio. It is recommended that you only use 30% of your credit limit. If you have a strong credit card payback history, ask your bank to increase your credit limit, which will lower your credit utilisation percentage.
  • Have a good mix of secured and unsecured debts.
  • If your CIBIL score is low, consider a secured credit card that is secured by a fixed deposit you have with a bank. Your CIBIL score will improve if you pay your credit card bills on time.
  • Don't rely on credit to get by. It is recommended that credit be used only when absolutely essential, and that credit cards not be used for daily requirements.
  • Do not process an excessive number of credit cards. There are a maximum of two credit cards that can be used. If you have too many credit cards, you'll have too many due dates, and the possibilities of missing some of them are considerable. Failure to meet deadlines will result in a low CIBIL score.
  • Do not attempt to settle any credit card debt. Bankers disclose all settled credit cards to CIBIL, resulting in a low CIBIL score.
  • If you are unsure about a person's credibility, do not act as a guarantee for their loan. The guarantor's credit rating would be affected if the person defaulted.
  • Don't keep any bank accounts or credit cards that aren't in use. Banks sometimes levy charges on such accounts, which get unpaid, leading in a low CIBIL score.
  • Set up smartphone alerts for all due dates so you can keep your bank account balances up to current on EMI and credit card payments.
  • Keep the credit card you've had for a long time and have always paid your bills on time. Do not turn off the same.
  • The usage of a peer-to-peer lending platform like Lendbox is one of the most effective and little-known ways to boost your CIBIL score. This website allows anyone with a poor CIBIL score to register and apply for a short-term loan. In the long run, timely repayment of such a short-term loan would boost an individual's CIBIL score.
  • If you've recently been rejected by a bank, don't apply for a loan or credit card right away. All of these denials are included on your CIBIL report, which could lead to another bank rejecting your application.
  • In the event of a dispute, do not fail to make your minimum due payment by credit card. If these disagreements are addressed, you will receive appropriate credit from the bank; nevertheless, if you fail to pay the minimum due amount, the bank will report this to CIBIL.
  • When applying for a credit card or a loan, offer accurate information so that your application is not rejected due to inaccuracy. When a person's credit card/loan applications are denied twice in a row for whatever reason, his or her CIBIL score decreases.
  • When you need a loan, don't make too many enquiries to different banks. Because all queries are recorded, banks may become confused if an individual makes too many enquiries, thereby impacting their CIBIL score.
  • Do not make large payments all at once, as banks may get suspicious, resulting in a worse credit score.

A person who has never borrowed before will have a very low CIBIL score, which may result in future credit card applications. As a result, it is recommended that such a person gradually build up a credit score by taking out small loans as needed. Borrowing credit and different forms of loans (secure and unsecured loans) for a shorter or longer period of time might help you get a good credit score. You can also benefit from some other perks. Individual loan categories can have higher loan amounts and cheaper interest rates.

If you're having trouble with your CIBIL score, get assistance from a CIBIL score improvement company.

If you're unsure about your CIBIL score or how to enhance your bad credit report, you can seek help from a CIBIL score improvement company with prior credit industry experience. They will be able to advise you on the most effective measures to take in order to improve your score.

Every 30 to 45 days, CIBIL scores are updated. As a result, the results of any good activity you take to raise your CIBIL score will appear in your report after 45 days. Remember that a poor CIBIL score might be a nightmare for someone in desperate need of a loan. You must exercise extreme caution. A single erroneous step can be disastrous. As a result, adhere to the guidelines to maintain a healthy lifestyle. Always check your CIBIL score and review it on a frequent basis.

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