5 Easy and Effective Ways to Boost Your Credit Score

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Your credit score summarises your creditworthiness and lenders consult this metric to assess your repayment capability. Credit scores are issued by credit bureaus and the oldest among them in India is TransUnion CIBIL. Having an excellent CIBIL score, of 750 or above, makes you eligible for attractive loan offers: you get a loan approval quickly, even for unsecured offerings and get access to relaxed interest rates as well. 

On the contrary, a low credit score is indicative of defaults and as you slip down the scale, the chances of your application for credit being turned down increase. Nevertheless, if you find yourself face to face with a low CIBIL score, you can work towards improving it by giving yourself a few months. 

Here are 5 simple and effective ways by which you can boost your credit score. 

Fix errors that may have crept into your CIBIL report

You should check CIBIL report at regular intervals and especially when you have availed a loan. This way you can track your CIBIL score through the journey of repayment and rectify errors in the report, if any. These could take the form of a wrong EMI status or even an incorrect credit card balance figure. You can access your CIBIL report online and if you need to know how to check a CIBIL score and report, all you need to do is visit the official CIBIL website and follow the step-by-step instructions. You can also check your score and report without logging in here. 

Reduce your credit utilisation ratio

It is essential that you limit your credit utilisation when it comes to forms of revolving credit. This applies above all to credit cards and keeping the utilisation ratio below 30% is recommended by experts. Low credit utilisation indicates that even though you are eligible for finance you aren’t overly dependent on it.

Avoid making multiple loan applications at once

Though it can be tempting to make multiple loan applications at once in the hope of increasing the chances of loan approval, doing so is detrimental to your credit score. This is because with every loan application a hard inquiry follows, and each hard inquiry causes your score to drop a notch, by 3 to 4 points. So, if you make, say, 10 applications in a week, your score could drop by 30 to 40 points quickly and this could be the eventual cause of loan rejection. 

Make timely debt payments

Paying your current loan EMIs and credit card bills on time is a sure-fire and easy way to start building a clean repayment track record. You can set reminders so that you do not skip any of your EMIs or even automate them through a bill payment service online. While improving your credit score, servicing debt on time keeps penalty charges at bay as well. 

Opt for a mix of credit types

Having too many loans of one type, only unsecured or only secured, can be viewed negatively and to boost your CIBIL score while meeting your goals, opt for a healthy mix. This indicates that you are adept at handling both forms of credit and can pay dues over different tenor lengths successfully. 

These tips are sure to help you take your CIBIL score higher and once you have an ideal score, you can assure yourself of easy access to credit. The CIBIL score for personal loan approval is 750 and having this score or one over it can help you obtain collateral-free financing easily through the Bajaj Finserv Personal Loan. Here, you benefit from a sanction of up to Rs.25 lakh, flexible repayment tenor of up to 60 months, swift 24-hour loan disbursals, and the promise of no hidden charges. In fact, while an excellent credit score and the simple eligibility terms pave the way for quick approval, you can also check your pre-approved offer to gain instant approval through a customised deal.