You're going to learn how to improve CIBIL score metrics in this article and it's important to do so for many financial reasons. Your CIBIL score is a credit record that tracks the worthiness of an applicant with regards to loan application.
In general, a CIBIL score in excess of 850 is regarded as excellent, 750+ is good, a CIBIL score in the range of 600 to 700 is considered average and anything less than 400 is regarded as poor. These scores are an indication of credit earnestness of an applicant and banks or housing finance firms feel secure in lending to customers with a high CIBIL score, usually closer to 900. At the same time, a low score means the applicant is a high risk customer and hence the creditors won't risk lending their money for a loan that has a high risk potential of turning to a non-performing asset.
Therefore, the importance of CIBIL score is immense in loan application irrespective of it being a home loan, personal loan or any other kind of loan. A major reason why you should know how to improve CIBIL score metrics is that your CIBIL score is one of the most critical parameters that decides the home loan eligibility and dictates terms for home loan EMI.
How to Improve CIBIL Score - 4 Tactics
How to improve CIBIL score method #1- Pay off unsecured loans: One way to increase credit effectiveness and thereby improve CIBIL score is to repay as many unsecured loans as possible. The debt consolidation of unsecured credit like personal loans; loans against credit cards, etc. is the best way to improve the credit score. People with a higher number of unsecured loans usually have lower credit scores as compared to those with only one loan.
How to improve CIBIL score method #2 -Do not apply for fresh credit too quickly: One mistake that people normally make is applying for multiple credit cards or too many loans at one go. While they are under the impression that if they apply for multiple home loan products across different banks they can get the offer with low home loan EMI, it is not true. In reality making multiple credit applications at one go or within short duration negatively impacts the CIBIL score. Hence, it is advisable to take guidance from financial experts of credible web portals like housing.com for any kind of loan related dilemmas. Alternatively, people can also research for some of the best home loan products online on housing.com and can select the best product that appropriately fits their requirement.
How to improve CIBIL score method #3 - Streamline the payment process: Most times people who service their EMIs regularly under the impression that everything is fine with their credit record. However, it is not true. The credit score can be impacted negatively even if the EMIs for subsequent months vary by 15 days. Thus, it is advisable to streamline the payment process such that EMIs are serviced on the same date of each month. This is how to improve CIBIL score metrics with efficiently.
How to improve CIBIL score method #4 - Regularly check the CIBIL score – Sometimes, it is possible that even if all of the financial norms are followed, the CIBIL score of an individual is surprisingly low. This is because a member bank, housing finance firm or financial entity may have submitted incorrect information. A series of incorrect information eventually leads to low CIBIL scores. Therefore, it is best to regularly check the credit record and reach out to concerned financial entity for corrections in case of any discrepancy.