These days, the CIBIL score is the first item considered when someone asks for a loan, whether it be a credit card, home loan, or personal loan. Although it’s just a number, it tells the entire tale of your financial obligation. A bank or other financial institution will grant you a loan more quickly and at a cheaper interest rate if your score is high. Additionally, it gets challenging to secure a good price if this score is low.
Timely payment builds a reliable record
Your payment practices are the first step towards raising your CIBIL score. Paying your loan EMI or credit card bill on time demonstrates your responsibility as a borrower. Your credit profile is strengthened as a result. Using the auto-pay option in such a scenario can be quite helpful in ensuring that you don’t forget any payments and that your credit history stays spotless.
Balanced use of credit limit is a sign of wisdom
It’s crucial to avoid always using your credit card’s full limit if you have one. The Credit Utilization Ratio should be kept below 30%, according to experts. In other words, try not to spend more than ₹ 30,000 in a single cycle if your limit is ₹ 1 lakh. You show the bank that you are a good money manager by doing this.
You can avoid inadvertent losses by monitoring the report
Many times it happens that some old information or mistake remains in your credit report, which pulls down your score. Therefore, it is very important that you check your CIBIL Score report from time to time. If you see any kind of error, immediately contact the concerned agency and get it corrected.
The right mix of credit also creates a perfect balance
Diversifying your credit profile is preferable than depending just on one form of credit, such a credit card. Your credit mix is enhanced and your CIBIL score is strengthened if you also have personal, home, or auto loans. It improves your credibility and balances your profile.
Disclaimer: This article is written for the purpose of providing general information only. The information given in it is not financial advice. Before implementing any plan related to improving CIBIL score, please consult your financial advisor. All data and examples are for information only.
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