CIBIL score or credit score is a special three-digit scale, which reflects your financial habits and ability to repay the loan. Banks and other financial institutions decide on the basis of this score whether you will get a loan or credit card or not, and on what conditions. Many people have a question in their mind whether CIBIL score can be improved in a short time. So the answer is- yes. Raising your credit score in a short period of time may seem challenging, but with a little discipline and the right strategy, it is completely possible.
pay all bills on time
The most important rule to improve CIBIL score is – never delay the payment. Be it a credit card bill, loan EMI or any other payment, it is always better to make the payment before the due date. Delays or defaults can hurt your score.
Taking a credit card can be beneficial
If you have not taken any credit till now, your credit score is also not formed. Even though this may seem good in the beginning, it can become a problem when you need a loan. Taking a credit card builds your credit history, which helps in getting loans at lower interest rates in future. Secured (cash-backed) credit cards are a good option for first-time cardholders.
Keep credit utilization below 30%
To keep your CIBIL score better, it is important that you do not use more than 30 percent of your total credit limit. Suppose your limit is ₹ 1 lakh, then try to keep the expenditure within ₹ 30,000. This improves your CIBIL score.
Apply to increase credit limit
If you are making timely payments and credit utilization is low, you can request the bank to increase the credit limit. The increased limit shows that you are a responsible customer. However, even after increasing the limit, it is important to avoid spending excessively.
Adopt a secured or cash-backed credit card
Cash-backed credit card is an easy option to improve CIBIL score quickly. In this, you have to deposit a fixed amount with the bank, which becomes your credit limit. It is safe for the bank and new users easily get a credit card, and the score also improves rapidly.
Avoid taking multiple loans or cards simultaneously
Having too many loans or credit cards at one time can raise questions about your repayment capacity. This may cause banks to consider you a high risk customer. It is better to take limited credit and keep sufficient gap between different loans.
Keep a regular eye on credit report
There are four recognized credit bureaus in India namely CIBIL, Equifax, Experian and Highmark. If there is any mistake or wrong entry in their report, it directly impacts your score. By checking credit reports regularly, you can correct such mistakes in time and improve your credit score in 30 days.
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