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Simple Tips to Improve Your CIBIL Score

by janeausten
peraonal loan

Personal Loan apply is one of the most commonly searched terms by a borrower who is applying for a Personal Loan. Various factors influence a Personal Loan Criteria including your CIBIL score. TransUnion Credit Information Bureau (India) Limited or CIBIL is one credit bureau in India that is responsible for analyzing the credit transaction of people and businesses. Along with CIBIL, there are three other credit bureaus in India – Equifax, CRIF Highmark, and Experian. These credit bureaus are responsible for keeping track and record of the credit financial transactions where they provide you with a credit score or CIBIL score. CIBIL is a numeric representation of the creditworthiness of a borrower. It ranges from 300 to 900. A borrower with a CIBIL score of less than 650 is considered poor from a creditworthiness viewpoint whereas a borrower with more than 700 and close to 900 is considered as having a good CIBIL score. There are high chances for a borrower with a good CIBIL score to get the desired loan with a lower interest rate than a borrower with a poor credit score. 

Below is the tabular representation of the CIBIL score and creditworthiness: 

CIBIL ScoreCreditworthinessLoan Approval
750-900ExcellentVery High

Please note that this bifurcation is not sacrosanct, but indicative 

How to check the CIBIL score online? 

You can check your CIBIL score online by following the below steps: 

Step 1. Visit CIBIL’s official website www.cibil.com 

Step 2. Enter all needed information in the section that reads “get your CIBIL score”.

Step 3. Provide the necessary supporting documents and then confirm your details. 

Step 4. Wait for the OTP on your registered mobile number

Step 5: Once you receive the OTP, you can check your credit score at Myscore.cibil.com  

Here are a few simple tips to improve your CIBIL score:

  1. Paying your bills on time

Making timely repayment of your EMI will help you improve your CIBIL score drastically. Any delay in repayment can lower your CIBIL score. It is important to maintain discipline while you are paying your EMIs. And setting reminders while you are paying your EMIs will help you maintain a good CIBIL score. 

  1. Monitoring your CIBIL score 

It is considered good practice to check your CIBIL score at least twice a year. Checking your CIBIL score will help keep a check on the current situation and further improve your score. When a borrower checks his/her CIBIL score it is considered a soft inquiry and will not be reflected on the CIBIL report. However, when a lender requests a CIBIL report, it is considered a hard inquiry and the same is reflected on your CIBIL report. 

  1. Avoid frequent loan 

Applying for a loan frequently indicates that a borrower is credit hungry which impacts negatively on your CIBIL score. Also, when you apply for a Personal Loan, lenders ask for your CIBIL report which is considered a hard inquiry. Frequent hard inquiries will lower your CIBIL score faster. Also, you will be burdened with paying multiple EMIs at the same time which might result in default or delay in repayment. So, it is advisable to avoid applying for Personal Loans frequently. 

  1. Credit mix 

A first-time borrower will not have a CIBIL history or credit history. To build a good credit score, you must practice the method of credit mix which includes your secured and unsecured loans of long and short-term durations. 

  1. Credit utilization 

You should follow the thumb rule of not exceeding 30% of your monthly credit limit. Anything more than 30% of your credit limit will hurt your CIBIL score. 

What is the best Personal Loan procedure that you should follow? 

There are two ways you can apply for a Personal Loan – online and offline methods. Both methods have their advantages and disadvantages. You can directly visit the lender’s branch and follow the procedure that our branch staff will guide you with. On the other hand, to apply for a Personal Loan online, you can follow the below Personal Loan Online Approval procedure: 

Step 1: Visit the lender’s official website 

Step 2: Check for the Personal Loan section and click on ‘Apply Now’

Step 3: Fill up the Personal Loan application form

Step 3: Enter basic details for KYC and upload all the necessary documents

Step 4: Await verification and application assessment

Step 5: Receive confirmation on successful loan approval

Step 6: Approve and authorize loan amount disbursal

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