If you have a low CIBIL score, then don’t think it’s the end of all loans You can improve the score and go for credit. You can improve the score by following the given steps & it takes over six months and more for such improvements to reflect in one’s credit report.
Avail a recent credit report
Availing a recent credit report will give an individual an idea of their current position and where they went wrong. For example, if their score had dipped due to a couple of delayed payments, they should ensure that it does not happen again. Keeping targets for at least 6 months or so would help one to correct their errors if any.
Never delay payments
CIBIL score greatly fluctuates even when a minimum due is paid. One has to pay their full dues and EMIs on time to keep improve their score. It is a good idea to automate payments at the beginning of a month to avoid unexpected delays.
Creating a diverse credit-folio
This can act as evidence to any lender that one is capable of handling different kinds of credit. Creating a blend of secured loans and unsecured loans can achieve a diverse credit-folio. A high number of unsecured loans would not look favorable in any person’s name. You can lend money through gold loan, credit card etc…
Getting rid of unused credit cards
Keeping one or more credit cards idle is never a good idea. If there is no use of a credit card, one must make sure to close it with the bank.
Efficient debt handling
An individual’s score can improve well if they know how to handle their debts efficiently. For instance, a credit card works on the concept of revolving credit and may go out of control if not managed properly. In such cases, closing off credit card dues with a personal loan is a great move. One would have to pay less interest and also, can solve an issue efficiently.
Stop credit before it reaches the limit
Don’t use credit card till it reaches the maximum limit. Keeping to the Debt to Income Ratio would help one to stay on the safe side of using credit cards.
Avoid prolonging tenures
The tenure of an individual loan or credit is an essential factor that can improve one’s score. For example, if a person has taken a personal loan with a tenure of 3 years, and have raised the tenure midway for a smaller EMI, it may affect their CIBIL score.