A Guide to Fix Your Credit Score

CIBIL score ranges anywhere between 300 and 900, wherein the lowest is or the poor credit score and 900 is the highest. Your CIBIL score must be nearer to 900 to get a prudent deal on the rate of interest for loans. A credit score of 750 and above i.e., anywhere between 750 and 900 is looked upon as ideal by many lenders like non-banking financial companies and banks. You can check credit score easily by fetching the report from online lending institutions or respective credit bureaus. You can check your CIBIL score for free by hitting on the “CIBIL score check free online by PAN number”, which you may get from an online lending institution.

CIBIL score range What it means
Between 300 and 549 ∙       Low CIBIL score

∙       Irregular repayment habit

∙       Default in payment

∙       High exposure to credit

∙       High risk of becoming a defaulter

Between 550 – 649 ∙       Fair CIBIL score

∙       Multiple credit inquiries

∙       Later payment of EMIs and credit card dues

Between 650 – 749 ∙       Good CIBIL score

∙       Long credit history

∙       Responsible repayment history

∙       Eligible for get credit card and loan

∙       May have to make payment of a higher rate of interest

∙       Low risk of becoming a defaulter

Between 750 – 900 ∙       Strong CIBIL score

∙       Timely bill payments

∙       Zero defaulted payments

∙       Zero unpaid dues

∙       Cheaper rate of interest

∙       Responsible credit handling

∙       Clean credit report

∙       High negotiation power

How to enhance CIBIL score?

Now that you know why a credit score is crucial, read on to understand what measures you can implement to enhance your credit score. The requirement to enhance your CIBIL score usually arises just when your score is in problem, and you are looking to apply for a credit card or loan. If you assume that your credit score is not excellent then these are the major things, you must do to ameliorate it.

Check out your credit report – 

Reviewing your credit report periodically is a great idea as it would tell you 2 major things that is very crucial about credit score. The initial is the loan or credit card where the delayed or default payments exist that were responsible for bringing down your credit score. The next parameter it will enlighten you about the information recorded in the report. This will assist in fixing the score because if you focus on it then you may understand that there is a negative remark or info mentioned on the credit report. For raising a dispute for rectification, you can approach the credit bureau or bank.

Additional Reading: CIBIL Score Check Free Online by Pan Number

Make apt corrections to the mistakes or errors – 

You must ensure to dispute all the mistakes or errors instantly by approaching the official site i.e., www.CIBIL.com. Once you review your report from this site, you can understand the transaction that you agree or disagree with. You must act on any dispute you notice on your credit report within 30 days for rectification of the same.

Figure out the CUR (credit utilisation ratio) – 

Ensure that you do not make use of your credit card for all your transaction. Try to keep your CUR within 30 per cent or even less. When you do so, you will view a positive impact or effect on your credit score.

Avoid applying for credit continuously if rejected – 

If you have placed an application for a credit card or loan and your application has been turned down, the info will get recorded in your report. If you keep on applying with another bank instantly, then they will view your low credit score and your past rejections and might also reject your application. The best thing here is to not place an application again and ensure to wait for an improvement in your credit score.

Keep your application frequency low – 

One important reason why you must avoid placing an application for credit cards and loans multiple times is that each time you apply for credit, the financial institution will ask the CIBIL for your report and the inquiry will get recorded in your report. The enquiry by the bank can even make the credit score reduce after every request for the credit report. It means that you may suffer dual drawbacks, the initial being if you display a very credit-hungry record and the next that your credit score may get reduced even if you hold the potential and capability to repay the loan on time.

Pay your loans on time – 

In case there is any loan for which you might be delayed in making payment, then you must ensure to repay all outstanding dues of the same on priority and become prompt with all your repayments. In case you are struggling with your present loan EMI then you must pay the same by approaching your bank to restructure the debt and make the repayments simpler for you.

Pay your credit card dues on time in full – 

When it is to credit cards, the ultimate thing you must do is you must not come very close to your credit card limit. You must even ensure that you are not repaying back just the minimum due amount on your credit card as doing so would push you into a debt trap because interest is charged on the unpaid due, which keeps on accumulating.

Do not settle your credit card and loans – 

There are times when many tend to settle their loan or credit card. What it means is that by approaching your financial institution, you ask for a favourable deal that would permit you to close the loan deal and even reduce your actual amount outstanding. While financial institutions do sometimes entertain such kinds of requests, the settlement does show up on your credit report, which has a negative impact on your score and your willingness to take up more fresh credit.

Keep your borrowing to the lowest – 

In case you are applying for a lot of loans or always are nearing the limit of credit cards, then note that your credit scores most likely may reduce as such kinds of activities display extreme credit-hungry behaviour. The prudent thing that you must do here is not to opt for a loan until it is thoroughly required and ensure you do not come near your credit card limit.