Top 10 ways to increase CIBIL score

A personal loan is one of the best solutions available if an individual has fixed medical expenses, is short of funds for any crisis situation, or needs to cover other expenses such as children’s school expenses, house rent, rent payment, etc. Basically a personal loan can be availed for any purpose.

Although there is no collateral, lenders prefer to offer personal loans to artists who have a solid credit history or CIBIL score.

A good CIBIL score not only improves the chances of getting a loan, but also makes the process seamless. More importantly, most lenders will determine the loan interest rate based on the CIBIL score.

credit score

After reviewing the borrower's prior loan and repayment history and current open loans, independent organisations such as TransUnion CIBIL, Experian and Ivifax calculate the borrower's credit score. This score is a three-digit number that goes from 300 (lowest) to 900 (highest).

A high CIBIL score indicates a borrower's strong credit history and lending ability, while a low score indicates to the lender that the borrower may be riskier to lend to.

A good score and a French score

A CIBIL score of 750 or above indicates that the borrower has a good repayment history and is therefore on the level to pursue collateral-free personal loans. Even a score of 730-750 indicates that the borrower has a low chance of default.

A score of 600-730 decreases the chances of instant approval of a personal loan and may charge higher interest rates from lenders like lenders.

People with a credit score of 600 or less may find it possible to get a loan. There are still ways to get physiology on it. When lending to loan companies with low credit ratings, most lenders look for additional portfolios such as job security, guarantees with high credit scores and proof of additional income hire money or collateral.

Ways to manage your credit score:

Here are some of the methods of CIBIL score tools:

Make sure you pay all your dues and dues on credit cards on time.

If you have a credit card, make sure you not only pay the minimum due amount but also pay the intermediate amounts in full, that too on time.

The number of loans and the amount of loans should be proportionate to your income.

Don't exhaust the available balance on the credit card. Ideally, the monthly borrowing on the credit card should be less than 33% of the total limit. And, not too many credit cards.

There is a chance that the credit score may contain information that was entered incorrectly or appropriate information was overlooked. It may be a good idea to bring up any small or big technical issues to dissect the score. It is important to regularly inform yourself about your CIBIL score.

Apply for a loan jointly with someone with better credit or CIBIL score. The lender will receive the money even if one of the borrowers fails as both are answering for the repayment together.

Set up set instructions with your bank to pay all credit card holders and other merchants on the loan

Healthy mix of secured and unsecured loans

Exemption from filing multiple loan applications at one go

Try increasing your credit limit so that the utility ration drops

Once one improves their personal credit score, they can expect to get the best interest rates on any personal loans they go for in the future.

Estimate

CIBIL or credit score is used to assess a borrower's ability to repay a loan. The best eligibility criteria are available to those with strong CIBIL scores, while lower scores may result in higher eligibility criteria. By repaying your loans on time including interest and following a no-delay and no-default policy, you can steadily increase your credit score.

Once your credit score increases sufficiently, you can get significantly lower interest on personal loans than otherwise.

If you are looking for a personal loan, you should approach a reputed lender or a non-bank lender like IEL Finance.

IEL Finance (IIFL Finance) offers a larger portfolio, faster approvals and easier repayment options than most traditional banks. It offers instant turnover for personal loans up to Rs 5 lakh at attractive interest rates starting at 11.75%, and disbursement within no time.