October 1, 2024 · 10 mins read
Santosh Kumar
The importance of your CIBIL score cannot be overstated since it shapes your economic prospects, especially concerning loans, credit cards, and other related financial products. Challenges such as loan denial or a high interest rate when one's score is as low as 600 limit one's chances of getting good credit terms. But, there is good news: achieving this score is possible, and with grit and a well-coordinated plan, you can take your CIBIL score to 750 – a score with which one can borrow affordably.
A 600 score is often attributed to late payments, high debt balances, lack of an established credit profile, low credit limits, and balance volatility. However, these factors can be corrected over a definite period. Treat your finances professionally, and up to certain score levels, you can build it steadily.
The blog explains each point clearly on how to increase CIBIL score from 600 to 750. Treat your finances with respect from this day on, and not only will your credit reputation grow, but you will also be able to enjoy more favourable credit terms and improved loans.
The most important practice when it comes to your CIBIL score is understanding why people often look for their credit reports. This is a very useful and positive aspect, but one must always bear in mind that a few minor mistakes, including wrong addresses, amounts due on loans, and even some dues that have never been skipped, are enough to spoil what could have been a perfect score.
1. The official site of CIBIL can be accessed.
2. If not, you must sign up for a MyCIBIL account. Logging in will also enable you.
3. To explain, you can access your report as a CIBIL member once every calendar year and once every quarter on a monthly subscription – clearly not necessary.
4. When reviewing the report, it is important to focus on the credit accounts, repayment history, and inquiries and look for any errors, such as accounts created in error, incorrect repayment schedules, or payments that were reported as missed, although they were completed.
Timely repayment of credit card bills and loan EMIs is critical if you want to improve your CIBIL score. Payment history is weighted and accounts for 35% of a person's credit score. People miss due payments or make delayed payments, which adversely affects their scores. Thus, it is a factor to be considered when marketing oneself.
Here's how you can ensure you never miss a payment:
Use apps or calendar alerts to set reminders for all your bill due dates. This will encourage customers to make their upcoming payments.
You might want to register for automatic payments for additional safety and comfort. This way, all your payments will be made on time every month without you having to make an effort to do them manually.
Always make sure you pay off the highest-interest debt first. The situation will only get worse over time at high prepaid credit cards that frequently accrue high rates and fees. Such high debts add up to the credit utilization ratio, which can negatively impact the score.
If you cannot settle the balance in full, be sure to make the minimum required payment to avoid any late payment charges and damage to your credit rating. Supplying at least the minimum payment consistently is sufficient to assure the financiers of your creditworthiness had the need and reasons arise.
Over time, steady and timely repayments will gradually improve your payment history, which in turn improves your CIBIL score. Therefore, this method of repayment improves your credit profile and your chances of maintaining goodwill over the long term.
Read More:: How Much Cibil Score is Good? Find Out Now!
Timely repayment of credit card bills and loan EMIs is critical if you want to improve your CIBIL score. Payment history is weighted and accounts for 35% of a person's credit score. People miss due payments or make delayed payments, which adversely affects their score. Thus, it is a factor to be considered when marketing oneself.
Here's how you can ensure you never miss a payment:
1. Use apps or calendar alerts to set reminders for all your bill due dates. This will encourage customers to make their upcoming payments.
2. You might want to register for automatic payments for additional safety and comfort. This way, your payments will be made on time every month without you having to manually make them.
3. Always make sure you pay off the highest-interest debt first. The situation will only get worse over time at high prepaid credit cards that frequently accrue high rates and fees. Such high debts add up to the credit utilization ratio, negatively impacting the score.
4. If you are unable to settle the balance in full, be sure to make the minimum required payment to avoid any late payment charges and damage to your credit rating. Supplying at least the minimum payment consistently is sufficient to assure the financiers of your creditworthiness had the need and reasons arise.
5. Over time, steady and timely repayments will gradually improve your payment history, which in turn improves your CIBIL score. Therefore, this method of repayment improves your credit profile and your chances of maintaining goodwill over the long term.
Read More:: How to Improve CIBIL Score after Default
Whether a consumer applies for a loan or a credit card, the lender makes a hard inquiry about their credit in each application. When making applications for loans and deposits, it is best to spread them out both time and number to improve your CIBIL score. If you have too many inquiries at one point, it may show that you are about to go figure.
Here’s what you can do to lower the significance of such inquiries:
1. To avoid the burden of concentration, apply for various credits or loans at regular intervals. When applying for new debts, it is advisable to do so after a long period and not more than two types of credits or loans.
2. First, try to get a loan at a rate that is pre-approved for your application since no hard inquiry will be made in this circumstance.
3. Conduct an assessment of your ability to obtain the loan before beginning the process to limit the amount of wasted inquiries that would have detrimental implications on your present score. Therefore, they will assist in maintaining good scores or improving them.
Read More:: How to File a Complaint for Your CIBIL Score- Step-by-Step Guide
The period during which your credit history has been active is the second most important contributor to creditworthiness, also known as the CIBIL score. Creditors want to see that they are dealing with clients who have a deeper understanding of credit. It is essential to understand that closing most old credit accounts can also hurt the average account age and, as such, affect the overall score.
This is what you have to do about your credit age:
1. You don’t need to close your old credit cards, even though you don’t use them anymore. Such accounts are favourable as they increase your credit history.
2. Do not apply for several new accounts in a very short period. This will shorten the mean credit age, which may adversely impact the score.
3. It is possible to enhance the age of the credit history and subsequently increase the score by maintaining old accounts while being restrained from opening new ones.
A mix of credit types is also quite appealing to lenders. In this regard, there are secured loans like home loans and auto loans, as well as unsecured loans such as credit cards and personal loans. It is worth mentioning that not all types of credits affect one's CIBIL score positively. For example, heavy credit users who fail to maintain their payment schedule are at a higher risk of defaulting.
To achieve balance, credit diversity must be observed:
1. When you only have unsecured loans like credit cards, consider getting a small secured loan like a gold loan or home loan.
2. On the other hand, if your existing debts are mostly secured loans, responsibly using a credit card will be an effective means of enhancing your abilities.
3. Be cautious about applying for multiple loans simply to enhance your mix; this may backfire by increasing your debt liability.
4. Over time, a good mix of borrowed funds will also improve your score as you can demonstrate to credit institutions that you can manage various types of credit.
Read More:: How A High CIBIL Score Can Slash Your Interest Rates
If borrowers have debts marked as settled or written off on their credit reports, they face serious issues with their CIBIL score. In such situations, it is advisable to contact lenders and strike a bargain for the debts.
The following steps are undertaken in dealing with the outstanding amount:
1. Call the lender and propose a settlement or pay the entire outstanding amount.
2. When no dues remain, apply for a no-objection certificate (NOC) from the lending institution confirming the loan's closure.
3. Provide CIBIL with the NOC to revoke your report's settled or written-off status.
4. This improves the CIBIL score, which is greatly indicative of the borrower's credibility when one clears the outstanding debt and updates the CIBIL credit report with positive statuses.
Read More:: How To Read Your Credit Report
So, how to increase CIBIL score from 650 to 750? We can increase a CIBIL score from 600 to 750 in months with some strategy and discipline. If you watch your credit report and look for mistakes, make payments before the due date, keep your credit utilization low, or have different types of credit, you can boost your score over time and get better financial deals.
Time is of the essence. It takes time to improve one's credit score, but every slight improvement you make to your score will be helpful to you in one way or another. Upon achieving a score of 750, one will have better options in terms of credit and loans, more so low-interest rates geographies, and fewer restrictions than before.
You have taken the first steps of achieving and maintaining a good CIBIL score by following these guidelines responsibly.
Can my CIBIL score go up by 150 points in a short time frame?
Yes, but it depends on the specific issues affecting your score. Well, some factors, especially in the short run or period, can help raise your score quickly. Some of them are correcting anomalies in your report, reducing your credit utilization ratio, and even settling outstanding debts.
How often do you advise your CIBIL score check?
It is advisable to check it at least once a year and also before borrowing money through a loan or credit card. This prevents mistakes and misuse of one's credit.
If I pay all of them back as fast as I can, will my score rise soon?
Paying off debts favourably impacts your score, but it depends on time, credit utilization, payment behaviour, and many other factors.
Does closing accounts with old balances help enhance the score?
The average age of closed accounts goes down, which is bad for the score. However, it is advisable to close old accounts with old account histories because they may have a good repayment history.
In what ways does responsible use of a credit card contribute to incrementing my score?
Proper credit card usage, such as paying off outstanding balances in a timely manner and keeping the credit used low, manages to strike a balance and raise one's score over time.
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