Maintaining a good CIBIL score is absolutely essential if you ever hope to score a loan under good terms from a bank or a financial institution. An individual with maximum CIBIL score is viewed as a low risk person and therefore will always be favoured by lenders. That said, with credit cards being freely issued by banks, creating a credit history in these times is extremely easy.
However, maintaining a good CIBIL score is something that would need a lot of work. If you’re someone who’s looking to raise your maximum CIBIL score, here are 5 habits that you can cultivate to do so.
The first step to maintaining a good CIBIL score is to do a thorough check of your credit score and your credit reports. This will allow you to find out what your baseline is. Credit scores typically start from 300 and go all the way up to 900. Once you get an idea of where you stand on the credit score range, do another check after a month or so to observe if there has been any change.
If there has been a drop, you should then check your credit report to trace the root cause. Sometimes, the drop may have been due to incorrect credit information, an error, or even fraudulent activities. By keeping an eye on your scores and reports regularly, you would be in the perfect position to take appropriate steps to get it rectified at the earliest.
You’re probably aware of this necessity. But then, since it is an extremely important habit that can do wonders to your credit score, it needs to be reiterated again. Whether it is your credit card bill or your loan EMIs, always ensure that you pay them in full and within the due date. This will help you get closer to your maximum CIBIL score.
Any sort of a delay in repayment, even if it is for just a day, can end up wrecking your credit score significantly. So, if you’re a person who has a hard time remembering the due dates, you could set up reminders to help you remember or even place a standing instruction with your bank to ensure that you don’t miss repayments.
If you’re an individual who constantly applies for new credit facilities, then maybe it is time that you stopped doing that. Applying for multiple credit cards or loans can invariably end up lowering your credit score.
Therefore, a great way to keep your maximum CIBIL score as it is is to apply for new lines of credit only when absolutely necessary. So, the next time you get an offer for a new credit card or an attractive loan offer, it's best to not take it up unless you’re in need.
Credit cards are really convenient financial tools that let you pay for things even when you don’t have the required cash. However, overusing them can sometimes get your credit score down. One of the metrics that’s used to determine your credit score is your credit utilisation ratio.
So, if credit bureaus see that you’ve utilised your credit card to its maximum limit, they tend to dock some points off your score. To maintain a good CIBIL score, it’s best if you don’t utilise more than 30% of your total credit limit.
Another major metric that’s used to determine your credit score is your credit history. And so, it is a good idea to keep your credit card accounts active for as long as possible without closing them. This would help build valuable credit history, which would be considered as the basis for your credit score.
A good idea to keep your credit card accounts active is to use them. If you prefer not to use them regularly, then you could perhaps make small purchases to keep them active and generate credit history.
Following these five tips consistently is all that you would ever need to maintain a good CIBIL score. Once you’ve gotten yourself up to a good CIBIL score, you’ll see just how easy and effortless it is to get credit facilities from banks and financial institutions. If you wish to check your CIBIL score, you can do that on Finserv MARKETS. Simply enter the relevant details and get your credit report instantly. Head to the Finserv MARKETS site now.