Here are 6 tips on how to fix your cibil score. A low CIBIL score can be a huge hurdle, affecting your ability to get a Secured or unsecured loan, credit card, or even a better interest rate. However, it is not a permanent mark on your financial record. With hard work, financial discipline and strategies, you can bounce back from a low CIBIL score and restore your creditworthiness. Here’s how you can do it:
1. To understand your CIBIL score
Before tackling how to improve a low CIBIL score, it’s important to understand what this represents. A CIBIL score of 300 to 900 is a three-digit summary of your credit history, derived from information in your Credit Information Report (CIR), a score above 750 is considered good, while anything else the floor 600 can significantly hinder your creditworthiness.
2. Explain why this is the case
The first step to improving your CIBIL score is to find out what caused it to drop. The most common reasons are missed payments, high use of credit, high demand for credit in a short period of time, and lack of credit or credit cards. Get your CIBIL report, check it thoroughly and pinpoint the bad stuff.
3. Create a payment plan
Once you understand why you have a low score, develop a plan to address it. If missed payments or missed payments are issues, prioritize refunding overpayments. Contact your creditors to discuss payment options or other arrangements. Consistently making payments on time will gradually improve your score.
4. Reduce unpaid debt
Using high-quality credit—using up a large portion of your available credit – can negatively affect your score. Make it your goal to reduce outstanding debt by paying off the balance as soon as possible. Focus on paying off high-interest loans first, as this will save you money in the long run and affect your credit score.
5. Limit new loan applications
Every time you apply for credits, it puts your report into question more aggressively, which can cause your score to drop temporarily. Avoid applying for additional credit until your score improves. If you need to apply, put your applications on hold to minimize the impact on your score.
6. Maintain an appropriate mix of loans
A variety of loans, including a mix of secured (such as home loans, Loans against property) and unsecured loans (such as credit cards), can have a positive impact on your CIBIL score. However, treat them responsibly. Avoid borrowing too much just to diversify your loan mix.
7. Correct the errors in your CIBIL report
Errors on your credit report can also lead to a lower score. Check your CIBIL report regularly for inaccuracies, such as incorrect personal information, duplicate accounts, or misreporting. Dispute any errors you encounter with CIBIL by providing necessary documents to support your claims.
8. Use a secure credit card
A secured credit card, backed by a fixed deposit, is an excellent tool for rebuilding your credit score. Use it responsibly, use your credit sparingly and make payments on time. Over time, this can help improve your credit score.
9. Remain patient and consistent
Improving the minimum CIBIL score is not an overnight process. It requires constant hard work and financial discipline. Check your progress by checking your CIBIL scores and reports regularly. Celebrate small victories along the way to stay motivated.
10. Get professional advice
If you are struggling to improve your CIBIL score, consider seeking help from a financial advisor or credit counseling agency. They can offer tailored tips and tricks to help you get back on track.
In conclusion, it is quite possible to bounce back from a low CIBIL score through the right strategy. By understanding the factors that affect your score, making consistent efforts to manage them, and maintaining financial discipline, you can gradually rebuild your credit With patience and perseverance you can earn a CIBIL score higher and better investment opportunities in the future.