KNews Desk– If you are preparing to buy a house, buy a car or take a personal loan, then your CIBIL Score can be very important. Banks and financial institutions look at the credit history and credit score of the applicant before giving loan. Having a low CIBIL score may cause difficulty in getting a loan or the bank may give the loan at a higher interest rate. However, if your credit score is weak then there is no need to panic. This can be improved gradually by changing some important financial habits.
CIBIL Score is prepared on the basis of your credit history. This includes factors like how you have repaid your earlier loans or credit cards, the amount borrowed, how much of your available credit limit has been utilized and how often you have applied for a new loan or credit card. Therefore, to improve your score, it is important to first understand your credit report. The first and most important step is to pay your EMIs and credit card bills on time. Delay or default on payment can damage your credit history. Therefore, try to have sufficient amount in the account before the EMI date. Also pay credit card bill on time. If needed, the bank's auto-payment facility or reminder can be used so that the payment date is not missed.
Another way is not to overuse the credit card limit. If your credit card limit is Rs 1 lakh and you are using most of it every month, it can affect your credit profile. Therefore, it is better to control the expenditure as per the available credit limit. Also, try not to accumulate credit card dues for a long time. The third important step is to eliminate the old dues. If any loan or credit card amount is outstanding for a long time, do not ignore it. Plan to repay the outstanding amount as per your financial capacity. The record of past defaults or payment delays does not disappear immediately, but further consistent timely payments can gradually improve the credit profile.
The fourth way is to avoid applying for multiple loans or credit cards in a short period of time. When a person applies for a loan at multiple places, his credit history may be checked multiple times. Making multiple credit applications in a short period of time is not considered a good sign for your credit profile. Therefore, before taking a new loan, assess your need and paying capacity and apply thoughtfully. The fifth and important way is to check your CIBIL Report regularly. Sometimes information may appear on your credit report that is incorrect or may not be yours. For example, a record may appear of a loan that you did not take or the status of a payment may be entered incorrectly. In such a situation, a complaint can be made to the concerned institution and credit bureau for rectification.
Keep in mind that improvement in CIBIL score does not happen immediately. If you consistently pay EMIs and credit card bills on time, use your credit limit wisely and avoid taking unnecessary loans, you may see a positive change in your credit profile in a few months. Maintaining financial discipline for six months can be helpful, but the actual speed of improvement depends on each individual's credit history and current score. So it is important to focus on your financial habits instead of worrying about a weak CIBIL score. Steps like timely payments, limited credit usage, settling old dues, avoiding unnecessary credit applications and regular checking of credit reports can help improve your score in the long run.