Your CIBIL score is a crucial financial indicator that reflects your creditworthiness. A higher score enhances your chances of loan approval and enables you to access better interest rates and higher loan amounts.
If your CIBIL score is currently at 600, you might face challenges in securing loans or credit cards. However, with the right strategies and discipline, you can improve your score significantly.
In this post, we’ll explore seven effective ways to increase CIBIL score from 600 to 750, enabling you to unlock various financial opportunities.
7 Best Ways To Increase Your CIBIL Score
- Check Your Credit Report Regularly
Regularly monitoring your credit report is the first step towards improving your CIBIL score. Obtain a copy of your credit report from credit bureaus like CIBIL, Equifax, or Experian and review it carefully for any errors or discrepancies.
Dispute any inaccuracies found, such as incorrect personal information, inaccurate account details, or unauthorised inquiries. Ensuring that your credit report is error-free is essential for maintaining an accurate reflection of your creditworthiness.
- Pay Your Bills on Time
Timely bill payments are one of the most critical factors influencing your CIBIL score. Late payments can significantly impact your score negatively. Make it a priority to pay all your bills, including credit card bills, loan EMIs, and utility bills, on or before the due date.
Set up automatic maximum personal loan amount payments or reminders to avoid missing deadlines. Consistently paying your bills on time demonstrates responsible financial behaviour and contributes to a positive credit history, boosting your CIBIL score.
- Reduce Credit Utilisation Ratio
Your credit utilisation ratio refers to the percentage of your available credit limit that you’re currently using. Aim to keep this ratio below 30% to maintain a healthy credit profile. If your credit cards are maxed out or close to their limits, it can negatively impact your CIBIL score.
Pay down your credit card balances and avoid using them excessively. Additionally, consider requesting a credit limit increase or spreading out your expenses across multiple cards to lower your utilisation ratio.
- Avoid Multiple Credit Applications
Each time you apply for credit, whether a loan or a credit card, the lender conducts a hard inquiry on your credit report. Multiple inquiries within a short period can signal financial distress and lower your CIBIL score.
Limit the number of credit applications you submit and avoid applying for multiple loans or credit cards simultaneously. Instead, research your options thoroughly, compare offers, and apply selectively only when necessary.
- Maintain a Diverse Credit Mix
Having a diverse mix of credit accounts, such as credit cards, loans, and mortgages, demonstrates your ability to manage different types of credit responsibly. This diversity can positively impact your CIBIL score.
If you primarily have revolving credit (e.g., credit cards), consider adding instalment loans like personal loans or car loans to your credit portfolio. However, avoid taking on unnecessary debt solely for the sake of diversification.
- Keep Old Accounts Open
The length of your credit history is another crucial factor influencing your CIBIL score. Older accounts with a positive payment history contribute positively to your score.
Avoid closing old credit card accounts, even if you’re not actively using them, as doing so can shorten your credit history and potentially lower your score.
Instead, keep these accounts open and occasionally use them for small purchases to keep them active and maintain a positive credit history.
- Monitor Your Credit Regularly
Continuously monitoring your credit score and report allows you to track your progress and identify areas for improvement. Many credit card issuers and financial institutions offer free credit monitoring services that provide regular updates on your score.
Take advantage of these tools to stay informed about any changes to your credit profile and address any issues promptly. By staying vigilant and proactive, you can steadily increase your CIBIL score over time.
Conclusion
Improving your CIBIL score from 600 to 750 requires patience, discipline, and strategic financial management. By following the seven best practices outlined in this article, you can learn how to increase cibil score from 600 to 750 and explore various financial opportunities.
Whether aiming to qualify for the maximum personal loan amount or secure better interest rates on credit cards, a higher CIBIL score opens doors to better financial prospects. Start implementing these strategies today and watch your credit score soar to new heights.
