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People with a poor credit or CIBIL score may only get an approval for a credit card or any other financial products that require good credit score when the credit score improves to a satisfactory level for banks. In such a case, enhancing the credit score becomes vital and yet it cannot be done in haste. It takes a minimum of 12 to 18 months to enhance one’s credit score and get to a number that gives confidence to the financial institution you are about to apply for a loan or a new credit card. Also, it is important to note that the quantum of damage on your credit score also acts as a factor for how long it will take to improve your credit score. Often banks and financial companies have a different CIBIL score bracket for various products.
Here are some things an individual can do for damage control on credit score:
Nobody can hence accurately predict the time required to enhance an individual’s credit score. Credit improvement is however not too difficult if the effort is consistent over a long period of time. The main deal with improving credit score is taking care of the factors that affect your credit score.
Generally, a credit score of 750 and above is considered as ideal by the majority of banks and non- banking finance companies. A healthy credit score indicates that you can be trusted with credit. However, different credit bureaus have different ranges. Let’s take a look at different credit ranges.
If you have no credit history or you do not have enough credit history to be scored. This indicates that you are a new to the credit rating system.
If you have a credit score in this range, it suggests that you have not been responsible with your repayments and have several debt. It also means you have not maintained a high credit utilization ratio for a long time. Such customers with indicate a high risk of default and lenders will be wary of extending credit.
If you have a credit score in this range, it indicates that you have defaulted payment for a good number of times. Therefore, you will fall in the risk bracket to turn a defaulter as well.
A credit score in this range indicates that you have a record of consistent repayment history and a better understanding of handling credit. This also suggests that you have a sound financial health and are less likely to default credit.
With this credit score this high, lenders will know that you are at a very low risk of turning a defaulter. It also suggests that you have consistently displayed an excellent repayment behaviour and maintained a low credit utilisation ratio.
With a credit score of 850 and above, it suggests you have been on top of your game in terms of handling the credit and having mixed type of credit. A high credit score of 850 will put you in a position to receive the best deals related to credit cards and loans.
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