10 Easy Ways to Increase your CIBIL/Credit Score

How do you get better at something? Practice, of course! The same holds when it comes to improving your CIBIL score. Not only does your CIBIL score impact how well you’re able to finance the building of your new house, but it will also determine whether or not you are financially eligible even to build your house in the first place.

Analyzing your CIBIL score can provide some valuable insight into the financial health of your business, but many don’t know where to start when it comes to improving their score.  Fortunately, there are some steps you can take to improve your CIBIL score and help get that loan approved more quickly and without as much hassle. We’ve put together this quick guide to help you improve your CIBIL score and evaluate your financial health as objectively as possible.

What is CIBIL Score?

In banking, your CIBIL score is used to determine if you are credit-worthy. When applying for a loan, insurance policy, or simply opening a savings account, banks rely on the information on file with Credit Bureaus like Experian and Equifax. For example, when you apply for an auto loan or credit card, the bank pulls your credit report from one of these bureaus (or another bureau such as TransUnion). The bureaus then combine all of their info on you and generate a credit score (your Cibil Score) between 300-850. This can be accessed by anyone in need of information about your financial standing, including your employer, real estate agents, and even landlords!

1) Set Reminders to Repay on Time

You can set reminders to repay your loans on time. This will ensure that you stay on top of your finances. It is also good to avoid paying interest on credit cards to keep credit card debt under control. If you are using slice cards, you can install the slice app that gives you auto-reminders for payments on your notifications.

If you have any questions about improving your score, call your lending institution for more information. They can provide helpful insights into how you can improve your score over time, allowing you to make smarter financial decisions to keep improving your score and achieving your goals!

2) Check for Any Errors in Report

It’s important to go over your report and check CIBIL score for any errors. Check with each of your three credit bureaus (Equifax, Experian, and TransUnion) individually at least once a year. Review both positive and negative aspects of your report to make sure it’s accurate. If you find an error or believe a company isn’t using proper reporting standards, contesting an item on your credit report can help.

3) Try Maintaining a Healthy Credit Mix

Don’t just stick to one type of credit if you want to keep your CIBIL score high. Credit mix refers to how many different types of credit you have about each other. For example, if your score is based on both revolving accounts and installment loans—five revolving accounts and five installment loans would be a balanced mix. By contrast, someone with only installment loans but 10 of them would not have a balanced mix.

4) Clear Credit Card Balances Before Due Date

One of the biggest factors in your credit score is how much of your available credit you use. Make sure you’re only using about 30% or less by paying off debts as soon as possible and being sure to pay your bills on time (in full). Also, never charge more than you can afford to pay back. That way, even if there are a few late payments, they won’t affect your credit score so much.

5) Say No to Being a Joint Account Holder

Being an authorized user on a credit card account may improve your credit score because it shows that you have access to money, but being a joint account holder can hurt your score for two reasons. First, there’s an increased risk of default. If you co-own an account with someone who is likely to miss payments, you are legally responsible for all debts associated with that account.

Also, people with joint accounts tend to be viewed as higher-risk by lenders since they’re more likely to open up several accounts at once. If you plan to be a joint account holder with a spouse or family member, make sure to keep your limits low and never use them unless both parties are present.

6) Don’t Open Multiple Lines of Credit Too Fast

Don’t open a new line of credit before your prior account has been completely paid off. Opening multiple lines of credit too quickly can harm your credit score. It’s best to pay down existing debt and wait at least six months before applying for another card. Alternatively, it’s possible to get additional lines of credit without negatively impacting your score if you don’t use them regularly and pay each card on time and in full every month.

7) Get a secured card

One tip for improving your CIBIL score is to use a secured card. Secured cards are a good option for consumers who have less than stellar credit and want an easy way to start building up their scores. Secured cards require you to make a deposit when you open an account. This amount varies from one lender to another but generally falls in line with how much credit you will be able to receive. As long as you use your card responsibly, pay it off on time, and keep balances low, lenders may eventually issue you a traditional unsecured card.

8) Keep your credit reports clean

Improve your score by keeping your credit reports clean of errors and clutter. Negative marks on your credit reports will not just lower your scores, but they can also prevent you from getting a loan if you need one. A good place to start is by pulling a copy of each of your credit reports to ensure no errors or anomalies. If any discrepancies do turn up, take steps to have them fixed as soon as possible (most banks and lenders will help resolve disputes on behalf of their customers).

9) Limit Your Credit Utilization

A higher credit utilization rate will negatively impact your credit score. The general rule of thumb is to keep your total balances at or below 30% of your available credit limit. For example, if you have a credit card with a Rs 5,000 limit and no other accounts, try not to charge more than Rs 2,000 over a given period. If you already maxed out on that card and want to add another account, look for a new card with a large (more than 30%) limit to increase what you can spend—and keep an eye on your balance, so it doesn’t get too high again.

10) Increase your credit limit

An obvious step to increase your credit score is to increase your available credit. This will give you a higher Credit Utilization Ratio, which makes up 30%. The easiest way to accomplish this is by increasing your credit limit on cards that have been open for over a year and have a history of on-time payments. It’s best not to carry a balance on these cards; however, if you already do or can’t close them immediately, ask for an increased limit to have more available credit. A good rule of thumb is for every 10% increase in available credit, you can expect a 5 point jump in your score. For example, if you are using the slice super card, you can send the credit limit request over their app.

Let’s Wrap Up

There’s no silver bullet for raising your credit score – but these ten tips will help you on your way to a higher score. We haven’t touched upon each of these tips in detail, but we encourage you to do so as it may improve your score even more than just following through with our advice. Once again, keep in mind that there is no one-size-fits-all solution for any topic about finance and money. What works for someone else may not work for you and vice versa; try new things as you move forward. If you have a low CIBIL score, don’t worry. There are some credit cards for low CIBIL. You can check these too.