Prior to approving any kind of loan or credit card application, a bank will examine the applicant’s CIBIL Score. Therefore, before asking for a loan, ensure that your CIBIL Score is high. Credit scores are used to determine a person’s creditworthiness in the financial world. When your CIBIL score is low, it is more difficult to obtain credit from banks. A person’s CIBIL Score may be decreased if he or she is unable to repay a loan on time due to financial uncertainties or mismanagement.
Here are top 5 ways to help you improve your CIBIL score as quickly as possible!
1. Pay Your Dues in Time
Whether it’s for a home loan, a personal loan, or a credit card payment, the best practice is to pay on or before the due date. Late payments attract unnecessary interest and put you in a bad light.
2. Do Not Withdraw Cash With Your Credit Card
In dire need, you may be tempted to withdraw cash using your credit card. In this respect, a credit card is a double-edged sword. The cash you withdraw comes at an extremely high interest and makes you seem financially irresponsible, eventually lowering your CIBIL score.
3. Balance Your Credit Risk
The two types of loans that you can take are secured (like a house loan) and unsecured loans (like a personal loan). Maintaining an even balance of both these types of loans reflects responsible financial behaviour and increases your CIBIL score.
4. Fully Clear Your Monthly Credit Card Bill
Do not leave any balance payment on your monthly credit card bill. It’s a good idea to set up a standing order to clear the full amount pending on your credit card bill every month. It not only saves you from unwanted expenses in the way of interest and charges on your card; it also helps you improve your CIBIL score immediately.
5. Maintain a Low Credit Balance
Maxing out your credit card regularly shows that you are not financially responsible. It is always advisable to avoid using it to its full capacity, even if you feel confident of paying your bill in full. It increases your CIBIL score as well.