New Delhi, Jan 13: Your CIBIL score is not just a number but a quick look at your financial habits and responsibilities. If your score stands at 600, getting loan approvals might be tougher, or the interest rates would not be very competitive.
However, increasing it to 750 or more may change everything, giving you better options and more confidence when you require credit.
This post explores practical and effective steps on how to increase the CIBIL score from 600 to 750.
15 Practical Steps to Boost Your CIBIL Score
1. Start by Reviewing Your CIBIL Report
Everything starts by knowing where you stand. Get your CIBIL report and read it thoroughly. Look for things such as late payments, high outstanding debts, or reporting errors. These could be things that are bringing down your score.
For example, if you notice an amount for a loan that you have already paid off, that is a warning sign that you will need to correct. Knowing what is wrong allows you to develop a targeted plan of correction.
2. Pay EMIs and Credit Card Bills on Time
Late payments are the major reasons for a low CIBIL score. Regularly paying your EMIs and credit card bills before or on the due date makes a huge difference. A single missed payment can affect the score significantly.
3. Keep Your Credit Utilisation Low
This shows how much of your available credit you are using. If you often max out your credit cards, it is a sign of financial stress. Keeping your usage under 30% of your total limit can help improve your score.
For example, if your card has a Rs. 1 lakh limit, aim to spend less than Rs. 30,000 at any time. This habit will reflect positively on your credit profile.
4. Clear Outstanding Debts
Unpaid debts weigh down your score. If you have late payments, make it a priority to clear them off. This improves your financial health and learn
how to increase CIBIL score from 600 to 750 your score quite significantly.
5. Avoid Applying for Multiple Loans at Once
Every loan application will create a hard inquiry on your credit report, temporarily lowering your score. Applying for too many loans in a short period makes you look desperate for credit and can hurt your score further.
If you're considering options like an
instant loan without income proof, research thoroughly before applying to avoid multiple rejections.
6. Correct The Errors in Your Credit Report
Mistakes in your credit report can sometimes be the reason for a lower score. Check for errors such as incorrect personal information, loans you didn't take, or defaults you've already cleared. Dispute these inaccuracies with CIBIL to get them corrected.
7. Diversify Your Credit Portfolio
Having a mix of secured loans, like a car or home loan, and unsecured loans, such as credit cards, shows lenders that you can handle different types of credit responsibly. Relying too much on one type of credit can limit your score improvement.
8. Keep Your Old Credit Cards Active
The length of your credit history also affects your score. Older accounts show your experience in managing credit. Closing old cards can shorten your credit history and lower your score. Keep these accounts active, especially if they have no annual fees.
9. Use Secured Credit Cards for Controlled Spending
If your score is low, applying for a secured credit card is a good way to rebuild it. These cards are issued against a fixed deposit, and responsible use can steadily increase your score.
10. Plan Settlements Strategically
If you've defaulted on a loan, contact your lender to discuss repayment options. Settling overdue amounts can improve your creditworthiness, but make sure the lender updates your status accurately.
11. Avoid Frequent Restructuring of Loans
Restructuring your loans might reduce monthly payments, but it also signals that you're struggling financially. Use this option sparingly, as it can affect your credibility.
12. Be Careful about Joint Loans
Joint loans can be risky. If your co-applicant misses payments, your score will also be impacted. Only enter joint loans if you're confident about the other person's financial discipline.
13. Build a Financial Safety Net
An emergency fund will help you avoid late payments in case of a hard time. Even saving small amounts regularly can make a big difference when you face unexpected expenses.
14. Track Your Progress Periodically
Check your CIBIL score every few months to keep track of your development. If the score doesn't improve, re-check your financial habits and put in more effort in places that need improvement.
15. Borrow Responsibly
Borrow only what you need and can repay comfortably. Taking unnecessary loans or credit cards can harm your financial health and your credit score. Focus on improving your existing credit profile instead of adding more.
Conclusion
Raising your CIBIL score from 600 to 750 is not impossible but requires constant effort. Through these 15 steps, you can develop better financial habits, clear outstanding debts, and improve how to increase the CIBIL score from 600 to 750. This will help you access loans like an instant loan without income proof and put you in a stronger position to negotiate better terms.
