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  • How to Improve your CIBIL Credit Score

    Your CIBIL score or credit score is an important factor in determining whether you will be approved for a loan or not. CIBIL scores are generated based on your credit history which includes past credit taken and payment patterns in relation to them. A high score represents strong creditworthiness while a low score indicates low creditworthiness. Low scores will brand you a risky borrower and lenders will be hesitant to approve your loan application.

    What is a Good Credit Score?

    While there is no ‘good’ or ‘bad’ credit score, lenders are wary of extending credit to borrowers with a credit score of 700 or lower for loans like home loans. Lenders prefer a credit score of 750 and above for unsecured loans like a consumer loan.

    Credit Score Estimate

    What does it mean for your credit health?


    Excellent credit score indicative of consistent and unblemished record of past repayments

    You will likely get loans at competitive rates of interest from most banks

    Secured loans (home loan, car loan) as well as unsecured loans (personal loan) will be easily available subject to credit report


    Fairly good record which reflects fair loan repayment in the past

    Likely to get loans at competitive rates from most banks

    Depending on eligibility, you will receive secured loans (home, card loan) fairly easily

    For unsecured loans (personal,, credit card), banks might conduct further analysis


    Low score indicative of delays or irregularities in repayments in the past

    Lenders will avoid granting a loan, unless a significant credit check has been done

    You might have to pay aa higher rate of interest

    Credit providers might approve loans but at low LTV and high collateral


    Very low score, indicatives of over leverage or many irregularities in repayments

    Very difficult to obtain a loan from established financial institutions and creditors

    Credit report will reflect write offs/ delayed repayments/settlements

    Why Your Credit Score is Important

    Making money in this world is not hard, provided you have one key ingredient – Money. We live in times where we need money to make money, and we often spend precious moments of our lives thinking how to make this money. With banks and lending agencies opening up in every town and city, one might think that getting money will become easier, but this might not always be the case. Given the risk involved in lending, almost all financial organisations rely on certain criteria to gauge the repayment capacity of an individual. A credit score is perhaps the single biggest determinant when it comes to you availing a loan, which makes it critical for us to maintain our scores.

    Not only does a good score improve our chances of getting a loan/credit, but also helps us get a better interest rate (if played smart). While we give ourselves a makeover before approaching a lending organisation, paying attention to our score and giving it a makeover is just as important.

    Reason for Low CIBIL Score

    There are many reasons for a low CIBIL score. A borrower’s score can reduce because of his/her own errors and due to errors made by banks. Generally, mistakes made by banks include wrong information sent about a borrower to CIBIL and failure to update records among others.

    The main factor that affect the CIBIL score of a person is his/her own behaviour. The way borrowers deal with their finances can increase or decrease their scores. Mostly scores fall because of past behavior of the borrowers. Some of the common errors that borrowers make are:

    1. Outstanding Credit Card Balance - Some borrowers do not pay their total credit card bills every month and only pay the minimum amount due, which leaves them with an outstanding balance on their cards. What they do not realise is that this can reduce their credit score.
    2. Too Many Loans/Credit Cards - If a borrower applies for too many loans or credit cards, then every time a bank checks his/her credit report or score for processing the loan or credit card application it is counted as a hard enquiry. Too many hard enquiries can result in reduction of the score.
    3. High credit usage - If a borrower uses over 30% of his/her credit limit, then it negatively affects his/her score as it shows his/her dependency on credit is high.
    4. Delay in repayments - If a borrower delays in making his/her EMI payments, then it will be noted in his/her CIBIL report, which will reduce his/her credit score. Repayments are one of the important factors that is considered while calculating the credit score.

    How to Improve Your Credit Score

    How to Improve your CIBIL Score

    Now that we know why the credit score is important, let us take a look into what you can do to improve your score. The need to improve the score will arise only when your credit score is in trouble and you are planning to apply for a new loan or a credit card. If we are to assume that your score is not good then these are the things that you can do to help it improve.

    1. Check Your Credit Report
    2. Checking your Credit Reportsregularly is a good idea because it will tell you two things that are absolutely critical to your credit score. The first will be the loan or credit card where the defaults or delayed payments exists that have brought down your score. The second thing it will tell you is the information that is recorded in the credit report. This helps in fixing the credit score because if you notice that there is negative information, in the form of defaults or delays in payments, mentioned on the report you can always approach the bank and CIBIL to get the situation corrected.

    3. Don’t keep applying for credit if rejected
    4. If you have applied for a loan or a credit card and your application has been rejected, the information will be recorded in your credit report. If you go and apply to another bank immediately then they will see your low score and the previous rejection and may reject your application. The best thing to do in such cases is to not apply again and wait for the score to improve.

    5. Keep the frequency of applications low
    6. One more reason why you should avoid applying for loans and credit cards too many times is that every time you apply for credit, the bank will ask CIBIL for your credit report and the inquiry will be recorded in the report. The enquiry by a bank can also cause the score to come down after each request for your report. This means that you suffer two disadvantages, the first being that you display a credit hungry behaviour and the second that your score comes down even if you have every intention and capability of paying back the loan/card on time.

    7. Pay your loans
    8. If there are loans which you have been delaying the payments of then you should make it your priority to start becoming prompt with the payment. If you are struggling with the current EMI that you have to pay then you can approach your bank to help you restructure the debt to make it easier to pay.

    9. Pay your credit cards on time
    10. When it comes to credit cards, the best thing to do is to not come too close to the limit of your credit cards. You should also make sure that you are not paying back only the minimum amount due on your cards, you need to pay back the entire amount or at least a sizable amount.

    11. Don’t settle loans and credit cards
    12. Many times people opt to settle a credit card or loan. What this means is that they approach the bank and ask for a deal that will allow them to close the debt for an amount that is lower than the actual amount due. While banks do, at times, entertain such requests, the settlement does reflect on the credit report and will have a negative effect on the score or a bank's willingness to offer fresh credit.

    13. Keep the borrowing to a minimum
    14. If you are applying for too many loans or are always near the limit of your credit card then your score is likely to come down since such activities display a credit hungry behaviour. The best thing to do is not to take a loan until unless absolutely necessary and make sure you don’t come close to your credit limits on the cards.

    15. Get a mixed bag of credit
    16. When it comes to loans there are two types of loans, secured and unsecured. If you take too many unsecured loans, banks tend to see it as a negative and might be inclined towards declining your loans. What you can do to is to take both unsecured loans like personal loans and secured loans likes car or home loans. P.S Credit cards also counts as unsecured credit.

    17. Watch out for joint applicants
    18. This is actually a situation where you could suffer even if you are not at fault. In this scenario, if you are the joint applicant for a loan someone else has taken, and they have defaulted on payments then you too will lose out in your credit score as it will reflect in your report as well. The best way to avoid this is to ensure that the loans and cards are being paid for on time.

      While it is true that a bad credit score can be damaging towards your future credit requirements, the situation is not completely beyond repair. The only thing you need to keep in mind is that it takes at least a few months for the scores to improve so you need to strap in for a bit of a wait before your scores start showing any improvement.

    Your Credit Card's Impact on your Credit Score

    A Credit Card can affect your Credit Score. Read this and use it wisely to positively impact your Credit Score. Paying only the minimum due, maxing out your credit limit, skipping payment due to a dispute and multiple rejected applications affect your Credit Score negatively.

    • Minimum Payment only Paying your bill regularly is a good thing, but paying only the minimum due is not. It casts doubts about your financial stability.
    • Maxing out your Credit Limit It's ideal not to use more than 60% of your credit limit. If you max out your credit, it's taken as a sign that you rely too much on credit.
    • Skipping Payment due to a Dispute If there's a dispute regarding some charges, don't skip paying the bill. It spells double trouble! Once the dispute is settled, the Credit Card issuer will reverse the disputed amount to your account.
    • Rejected Applications If your Credit Card application gets rejected for whatever reason, especially more than once, it will damage your Credit Score. So, make sure you provide the correct information to avoid rejection.

    Maintain your CIBIL Score like a Pro

    Doing all things right and still facing problems with keeping your CIBIL score, wondering what you can do more? There are several factors that affect your CIBIL score, not just bad credit behaviour in terms of payments and credit limits etc. Credit choices and their related areas can also affect your score. Some reasons are listed below:

    Credit Utilization - When you use the option of credit you should always keep in mind the Credit Utilization Ratio. This ratio is a comparison of the amount of credit you have used to the amount credit you have balance. This ratio amounts to 30% of your actual score. So let’s take an example of Mr. Pandey, who has 5 credit cards, with a total of 10 lakhs of credit limit on all of them, and he decided to close 3 of the 5 cards since he actively used only 2 cards. After she followed the procedure to close the 3 under-utilized cards, his credit limit fell from 10 lakhs to 2.5 lakhs. Mr. Pandey made most of his spending on credit cards and his monthly expenditure would amount to 2 lakhs on his 2 active credit cards, due to his under-utilization of the other 3 cards his credit score drops significantly.

    Loan Enquiries - If you want to buy a new car or get a loan to buy your dream home, you would like to check with few banks before you make your decision. Making multiple enquiries can raise a red flag against your name and in turn affecting your score drastically. For every enquiry you make with a financial institution, you enquiry gets recorded, and affects your score making it difficult for the bank to decide to provide you with the credit. Every enquiry brings down your CIBIL score. Let’s take the example of Mr. Pandey who wants to buy a villa in the suburbs of his city, he contacts 5 different banks for a loan of 80 lakhs, to ensure he is getting the best deal. Each of these enquiries have been recorded in CIBIL. With each record of enquiry Mr. Pandey is now eligible only for 65 lakhs, despite having a good repayment history.

    Repayments - Confused? How can repayments lead to a lower CIBIL score? Well, if you suddenly pay off your credit cards bills with a huge amount of money, it can affect your score. It can make your financial records look unstable and in turn could lead to a lower score. Whereas repayment on time in an effective manner will have a positive influence to your CIBIL score. Let’s again take the example of Mr. Pandey, whose uncle expired and in his will left him with 30 lakhs, since he has received such a huge sum, Mr. Pandey decides to pay off his 2 lakh credit card bill with the hopes of increasing his credit score for his good repayment before time, but when the bank receives this payment, they are suspicious of the transaction and notes the same, thereby decreasing the score rather than increasing it.

    Q. Do late payments and high utilization of credit limits have a negative effect on your score?

    If you have missed payments on any of your loans over the years, your credit score would be negatively affected. A higher utilization pattern equals to more repayments and, therefore, negatively affect your score.

    Q. How do more number of personal (unsecured) loans affect your score?

    More number of personal (unsecured) loans would also affect the score in a negative way since such loans have a high rate of interest compared to car or home loans and, therefore, more likely to result in defaults.

    Q. What if you are ‘credit hungry?’

    If you are in urgent need of moolah and applied for credit from several lenders, it will have a negative impact on your score since lenders will then be wary to issue a fresh loan while evaluating your creditworthiness.

    Q. How can I improve my credit score?
    • Timely payment of EMIs results in a clean credit history.
    • Make full payments on your credit card instead of the minimum payment. If all else fails, try to make the minimum payment.
    • A credit card debt is known as revolving credit which helps build a good credit score faster (provided payments are made on a regular basis) compared to a loan.
    • If your utilization of credit limit has been low, it will have a positive effect on your score.
    • Prompt repayments help boost your score.
    • Reviewing your credit history regularly helps you gauge your financial health.
    Q. Can my CIBIL score be improved?

    A CIBIL score is a representation of your entire borrowing history. It’s a representation of a trend, which means that if you’d defaulted on a loan in the past, merely paying off a few credit card bills on time won’t raise the score drastically. You’ll need to thoroughly involve yourself in a routine of honouring payments on time, every time, taking more secured loans as compared to unsecured loans and never missing a credit card payment. The score will improve gradually, as you keep honouring your debts.

    News About CIBIL Credit Score

    • Credit Score can Now Potentially Decide an Applicant’s Job Prospects

      In a recent trend becoming popular in India, potential employers are tracking an applicant’s credit score before okaying the application.

      At present, the three number digits are being used to analyse a person’s creditworthiness but according to the latest trend, the same will also impact their job prospects.

      What this means is, a candidate mustn’t just worry about doing well in the interviews, they will also need to make sure to keep their credit history. A HR from a leading company has said that doing so can bring down the extent of irresponsible employees joining their company.

      She further went on to say that a lower credit score shows a person has been poor with their finances and that could possibly act as an indicator into a person’s habits and lifestyle. For instance, there are also companies that are analysing profiles based on the debt a person has. In case he or she has a high debt and an erratic repayment history, chances are their predicament can affect their ability to perform better in their job.

      15 October 2018

    • 3 Simple Steps to Improve Your CIBIL Score Before Applying for a Personal Loan

      A CIBIL score is a measure of your creditworthiness. It represents your ability to repay the loan amount. It is an important measure which lenders like banks and non-banking finance companies (NBFC) take into consideration before approving your loan or credit card application.

      What is a CIBIL Score?

      A CIBIL score is a numerical representation of your ability to handle the credit. It is a 3 digit number between 300-900, 900 being the highest. A CIBIL score is calculated by TransUnion CIBIL, which is one of the oldest credit bureaus in the country. Lenders generally consider a CIBIL score of 750 and above is ideal. A higher CIBIL score increases your chances of getting a better credit card with higher rewards and benefits, lower interest rates for loans, as well as quicker approval for your loan or credit card applications.

      Here’s how you can improve your CIBIL score”

        Having a good balance of credit: There are two of types of credits - secured and unsecured credit. In order to improve your CIBIL score it is important to strike a good balance of these two loans. A secured loan is a loan given out by a financial institution wherein an asset is used as collateral or security for the loan. Your assets like house, gold, and others are kept as collateral against your loan amount that corresponds to the asset’s value. On the other hand, an unsecured loan is wherein you don’t have to keep any of your assets as collateral. Loan against property, Car loan are examples of secured loan while credit card, personal loans are examples of unsecured loan. When you have a good balance of secured as well as unsecured loans, it suggests that you are capable of handling both types of loans.

        Maintaining a low credit utilisation ratio: A credit utilisation ratio, is the a ratio of total credit utilized by customers on their card in respect to the total amount of credit available in their card. It is essential for customers to maintain a low credit utilization ratio. According to experts, you should ideally spend only 20% to 30% of your credit limit as it will be beneficial to maintain your credit scores in the long run. A higher credit utilization ratio shows that you are overusing your money and will not be able to pay back the balance amount.

        Pay all the bills on time: It is extremely important to pay your bills on time as your repayment accounts for 35% of your credit history. Avoid making delayed payments as it will affect negatively on your credit score. Make sure to pay your credit card bills and other EMIs on time. There are several simple ways that will help you pay your bills on time. You can give standing instruction to your bank to pay off your credit card bill automatically before the due date. Also, you should always pay the entire bill amount. Never pay minimum amount due on your bills as it will reflect badly on your credit score. It suggests that you are struggling to repay your credit debts..

      16 August 2018

    • Credit Score will not Take a Hit When Checked

      In a survey conducted by Discover, a financial service company, it was found that one-fifth of the credit card users believe that checking their credit score could bring down their score. It is important to understand that checking one’s credit score does not impact your credit score. Checking your credit score is a soft inquiry and has zero effect on your score. However, when you apply for a loan or credit line, the lender will make a hard inquiry into your credit score which can reduce your score by a few points.

      It is recommended that a soft inquiry about your credit score could help one keep track of their finances more effectively. This could also help prioritize any outstanding dues or other financial obligations. Keeping check on the credit score could also encourage responsible credit management.

      6 August 2018

    • Need an Instant Loan but Low on Credit Score? This Will Help You Big Time

      In order to get an approval on your loan application, you need to have a high credit score. A low credit score increases your chances of not getting a loan from banks and non-banking finance companies (NBFC). A new credit rating system has been introduced by CASHe, a digital lending company for individuals who are seeking an instant loan but have a low credit score. Dubbed as ‘The Social Loan Quotient’ (SLQ), the unique credit rating system will scan social behaviour of the applicants and show the credit score.

      The new rating system from SLQ will help a large number of people who have no credit history and are thereby denied credit. The SLQ platform will leverage big data analytics, AI (artificial intelligence), and predictive tools. The CASHe platform will enable customers’ to learn about their scores within few seconds as they are generated in real-time. As a result, customers will be able to know if they are qualified for a loan instantly. Once the loan application process will be completed, customer’s will get to see their personal SLQ score. This will provide the user with a reliable tool for accessing his/her creditworthiness.

      Ketan Patel, CEO, CASHe said that the main aim of the platform is to focus on individuals who have very low or almost no credit history. The platform is looking forward to revolutionise the digital lending space in India. At the same time it is eyeing to encourage other credit institutes and agencies to avail SLQ as to assess creditworthiness of mass India.

      30 July 2018

    • How to Improve a 600 FICO Score for Better Financial Services and Products

      Being well-rated is utmost important for each one of us. A 600 FICO score is not a great score, yet is a better score. The fact is that a credit score of 600 shall harm you financially. A credit rating of a person replicates his or her previous account history. A 600 FICO score tells your lenders that you have made a few financial mistakes. Due to which, you will not be able to obtain attractive interest rate offers. It will also lessen the probabilities of getting better credit card offers. The following are the five tips for you to improve a 600 FICO score:

      Pay your credit card bills in time  

      If you default on payments, your credibility gets affected. Your credit rating shall fall by 100 plus points if you remit your bills late by 30 plus days. The same rule is applicable for car loans and student loans. You must create a record of remitting your credit card payments within the stipulated deadline. Making payments in time will help you enhance your creditworthiness.

      Do not neglect other bill payments 

      Financial institutions will report your bank history, payment history and account history to the respective credit rating agencies. If you have a history of late payments, your credit score is impacted negatively. Lenders will not report other payments to credit rating bureaus. This consist of medical bills, insurance premiums, cable bills, utility bills, electricity bills, etc. Even these bills should be settled on time. This way you can improve your creditworthiness.

      Clear debts on your credit cards 

      Clearing debts on credit cards can have a positive impact on your credibility. You end up paying higher interest rates if you cannot settle debts on credit cards. Make sure you manage an optimal credit utilisation ratio, which is a ratio between the credit limit granted by creditors and the actual amount spent. Creditors like to see you managing a standard credit utilization ratio. Be sure to settle your credit card bills as quickly as possible. This will help you build a good credit report, which in turn enhances your credit rating.

      Make sure you don’t close paid-off credit card accounts

      Credit utilisation ratio will increase if you close paid-off credit card accounts. Let’s consider an example. You hold four credit cards with an overall credit limit of $10,000 and the credit card due of $2,000. If you close a credit card account that has a credit limit of $3,000, you can now use $2,000 out of $7,000 remaining credit limit. In this case, the credit utilisation ratio will increase and in the end, your credit score gets affected.

      Obtain free copies of credit reports from credit rating agencies

      You are allowed to obtain a free copy of credit report from each credit rating companies once a year. Many people do not get their credit reports. Once you obtain a credit report, be sure to verify your personal and financial details. If you notice any error(s), the same can be brought to the notice of the respective credit rating agency. Errors can be fixed if any. An error-free credit report will definitely improve a credit score.  

      12 June 2018

    • 5 Ways to Improve Your Credit Score in 2018

      A credit score is important as it represents an individual’s credit worthiness. A good score increases your chances for credit approval. Here’s 5 simple ways in which you can improve your credit score this year.

      1. Make payments on time: In order to prove that you can manage your debt efficiently, make sure to make your credit payments on time. Avoid delays in paying your bills to maintain a good credit
      2. Review your credit report: Your credit report might have errors so it’s better to review your credit report.
      3. Increase your credit limit: Request your credit card issuer to increase your credit limit. A credit limit is the total amount you can borrow through the card.
      4. Monitor your CIBIL Score: It is better to check your CIBIL score from time to time. All credit bureaus offer one free credit report that includes your CIBIL score.
      5. Maintain low credit utilization: Take efforts to maintain a low credit utilization ratio. This essentially means, the utilization amount should be lower than the credit limit of a card.

      22 February 2018

    • Credit locking apps freezes up

      A free consumer service has been introduced by Equifax, which enables people to latch access to their credit archives through smartphones. It was not successful. Are you amazed? The consumer-facing technology of Equifax liquefied down after cyber thieves got access to more than 145 million numbers of social security in a fissure at Equifax.

      The tools that are used to trace the potential of consumers’ vulnerability was unsuccessful. The people, who were trying to lock their files of credit, expanded hours together at the task. You could be abstracted and provided a choice to eradicate your name through the lists, which are given by the credit rating agencies to the issuers of credit cards and insurance products. This is something you may require to carry out if you are not swamped with the offers of the market.

      2 February 2018

    • The Impacts of Credit Score on Your Daily Life

      Creditworthiness is essential for any individual who plans to apply for a loan or credit card. The CIBIL score or credit report reflects how credit worthy an individual can be. Higher credit score proves the creditworthiness of an individual and therefore banks or any financial organizations easily grants the loan at lower interest rate. However if the credit score is below 750, it can prove negative for the application process.  

      To have healthy credit score keeping a check on the credit score by availing the free CIBIL score from the credit bureaus is vital. Even subscription based credit score can also be availed that will include the report in-detail. Paying all the monthly bills, not availing new credit without any valid reason, maintaining the old credit accounts, having low credit utilization ratio and a mix of credit together helps to boost the credit score.

      22 January 2018

    • This is how credit report errors can affect you

      There has been a sharp rise in the use of credit scores for most kinds of transactions. Be it the process of getting a loan to even recruitment of employees, credit score is becoming more and more important with every passing day.

      One of the credit bureaus in the country, CIBIL, recently joined hands with different e-commerce companies and firms that screen employees. While the e-commerce companies will use credit score to disapprove or approve loans to applicants who purchase goods from them on equated monthly installments (EMIs), the firms that screen employees will use credit score to filter employees who have large sum of debts to pay. The logic behind this is that the employees will be worried about paying their loans and will not focus on their jobs.

      The telecom sector uses the credit score of an individual to pick customers for their postpaid plans. In fact, some schools in the country have also begun to take note of the credit score of the parents before given admission to their wards.

      A survey carried out by Credit Sudhaar, an institution that helps individuals improve their credit score, stated that out of 1,200 respondents throughout India, every third credit report had an error. So, it is advisable to check your credit history from time to time.

      23 May 2017

    • CIBIL hopes to set up a credit score for online shoppers

      With more than 380 million users on the internet in India, the country has now become the 3rd largest internet user in the world. 60% of these users are online shoppers as well. The risk profile associated with these users in still unknown, with the hope to step up, and maintain credit scores, CIBIL has decided to step in. The rating agency collects records on a person's payments of credit cards, loans of all types - cars, home, corporate, agricultural, etc. The plan to set a credit score for online shoppers will help companies like Amazon, Flipkart, eBay, and other e-commerce to gauge the credit profiles of their customers, and accordingly offer payments options for the products based on your score, this options can either be installments or in cash

      25 February 2016

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