Struggling with a low CIBIL score?
A good credit score always pays and has multiple benefits. A high score can get you quicker and better loans when you need them most. At the same time, a low score can be horrifying for individuals with an urgent need of money. It will affect their borrowings critically.
There are multiple ways to avail loans, but that totally depends on the amount required by the borrower. In today’s modern world, banks need proof of trust, mainly your CIBIL score, to verify whether you’re worthy enough to repay their loan or not. In India, CIBIL is the most authoritative lending credit rating agency, whose score is used as a reference point to inspect the creditworthiness of borrowers.
Your CIBIL score is good enough to tell them about your past financial habits and how you dealt with it like personal loans repayment, credit card bills, etc. However, at times, there are individuals having a low credit score due to their past repayment issues.
For your information, there are a few tried and tested methods that you can use to improve your CIBIL score. In this blog, we’ll discover those ways and how you can effectively leverage them to become creditworthy once again in the eyes of banks. Let’s explore.
7 Tried and Tested Ways to Improve Your Credit Score Quickly
All is not lost if you don’t have a good score. You can always build up a healthy credit score with these 7 smart moves. However, it requires that you practice these steps regularly and frequently, and also keep an eye on your personal loans and credit card usage. Continue reading to dive deeper into the tried and tested methods to uplift your credit score.
- Pay Your Dues on Time
Missed payments? They’re a quick way to degrade your credit score. Your payment history weighs heavily, so even one late EMI or credit card bill can really drag your score really down. To safeguard yourself from this, you can set reminders or automate payments—because punctuality pays off, literally!
Think of it this way: timely payments show lenders that you’re reliable. Plus, avoiding late fees is a sweet bonus. Services like auto-debit ensure you never slip up. So, if you’re serious about boosting your score, prioritize deadlines. Consistency here builds trust—and a healthier credit profile!
- Use Your Credit Prudently
Maxing out your credit card? That’s a red flag for lenders. Your credit utilization ratio—how much credit you use versus your limit—should ideally stay below 30%. High spending signals dependency, which can dent your score. So, spend wisely and keep balances low.
Think of credit like a trust meter—the smarter you use it, the more lenders believe in you. Need a quick score boost? Pay down existing debt before taking new loans. Proving you can manage credit responsibly works wonders. Remember, restraint today means better financial freedom tomorrow!
- Maintain a Healthy Credit Mix
Balance is key if you want a stronger credit score! A mix of secured loans (like home or car loans) and unsecured credit (like personal loans or cards) shows lenders you can handle different types of debt responsibly. But don’t overdo it—too many unsecured loans can raise red flags.
Think of your credit profile like a financial portfolio—diversity builds trust. A healthy mix, paid on time, tells lenders you’re reliable. So, if you’re aiming for a quick score boost, go for a healthy credit mix as it matters just as much as timely payments!
- Apply for Credit Within Your Limit
Desperate for that shiny new credit card? Hold on! Applying for too much credit at once makes you look risky to lenders. Each application triggers a hard inquiry, which can impact your score. So, be selective—only borrow what you truly need and can repay comfortably.
Remember, lenders love responsible borrowers. If you’ve already maxed out existing cards or loans, pause before applying for more. Smart borrowing today keeps your credit score strong tomorrow. Stay within your limits, and watch your score rise!
- Opt for Longer Loan Tenures
Stretching your loan tenure might seem costly, but it’s a smart move for your credit score! Smaller EMIs mean easier repayments, reducing the risk of missed payments that hurt your score. Plus, consistent, on-time payments over a longer period build a rock-solid repayment history.
Think long-term: A well-managed loan shows lenders you’re reliable. Just ensure you don’t overextend—pick a tenure that balances affordability with interest costs. Your credit score will thank you for this!
- Review Your Credit History Frequently
Would you drive blindfolded? Then why ignore your credit report? Checking it regularly helps you spot errors, like unpaid loans marked “pending” or wrong personal details, that could drag your score down. A quick review every few months keeps surprises at bay.
Think of it as a financial health checkup. Catch mistakes early, dispute them immediately, and watch your score bounce back faster. Remember, your credit report is your story—make sure it’s accurate! A few minutes today could save you from big headaches tomorrow.
- Avoid Being a Guarantor
That favor for a friend? It could cost your credit score! When you co-sign a loan, you’re equally responsible—missed payments hurt both your finances and credit health. Even if you trust them, life happens, and defaults stick to your record.
Protect your score: Say no unless absolutely necessary. Your financial future is too precious to gamble. Remember, kindness shouldn’t come at the cost of your own stability!
Bonus Step:
Report Discrepancies in Your Credit Report, If Any
Spot a loan you never took or a payment marked “late” when you paid on time? Don’t ignore it! Errors like these can unfairly tank your credit score. The good news? You can dispute them directly with the credit bureau, and they’re legally required to investigate.
Act fast: The sooner you flag mistakes, the quicker your score recovers. Keep documentation ready and follow up persistently. Remember, your credit report should reflect your true financial behavior, not someone else’s mess!
Conclusion
Improving your credit score is easier than you think. Follow these basic rules: pay bills on time, don’t borrow too much, and check your credit report for mistakes. These simple habits will slowly but surely raise your score.
Remember—good credit takes time. Don’t expect overnight results, but if you stay consistent, you’ll get there. A better credit score means better loan offers and less stress about money. Start today, and watch your credit health improve month by month!
