Learn how to improve your CIBIL score with simple tips to boost credit health and secure better loan offers with lower interest rates.
CIBIL score
Managing your finances well means building a solid credit history. One of the most important ways to do that is by maintaining a healthy CIBIL score. Whether you are planning to apply for a home loan soon or simply want to stay financially prepared, knowing how to improve your CIBIL score can give you a clear advantage.
What is a CIBIL Score and Why Does It Matter?
A CIBIL score is a three-digit number-typically between 300 and 900. It gives lenders an overview of your creditworthiness. It’s based on your borrowing and repayment history and is issued by TransUnion CIBIL, one of India’s leading credit bureaus.
Among other factors, your CIBIL score is often the first thing lenders check when you apply for a Home Loan. It helps them assess your repayment capacity and financial management.
A score above 750 is usually considered a good score. This means you are likely to secure a home loan at a better interest rate. On the other hand, a lower score may result in limited loan offers or higher rates.
How to Improve Your CIBIL Score?
Improving your score is about consistent habits. Here are some ways to start:
- Pay your EMIs and credit card dues on time
Missed payments can reduce your credit score. Set up reminders or auto-debits to make sure you never miss a due date. - Avoid maxing out your credit card
Using your card for too much of its limit-say 80% or more- can reduce your score too. Try to keep usage under 30% of your total limit to show healthy spending habits. - Don’t apply for multiple loans at once
Each loan application triggers a hard enquiry into your credit report. Too many of these in a short period can bring your score down-even if you are just comparing options. - Maintain a mix of credit types
Having both secured credit (such as a home loan) and unsecured credit (such as a personal loan or credit card) shows that you can manage various types of debt responsibly. - Monitor your credit report
Regularly monitoring your report can help you spot errors or drops early. Make it a habit to check your current CIBIL score every couple of months.
Over time, your score improves, and with it, your ability to access credit on the terms that suit you best.
Common Credit Score Myths Debunked
There are a few misconceptions about credit scores that can misguide borrowers. One such belief is that having no loans automatically translates to a good score. In reality, no credit history simply means there’s nothing for lenders to evaluate-whereas a proven record of responsible borrowing can actually work in your favour.
Another misconception is that checking your own score affects it negatively. That’s not the case. A CIBIL score check initiated by you is considered a soft enquiry and has no impact on your credit score. Similarly, closing older accounts is often thought to increase your score, but the truth is that long-standing accounts reflect financial stability and repayment discipline.
Subscribe today by clicking the link and stay updated with the latest news!" Click here!
