Whether you are planning to get a housing loan or applying for any other credit product, know that to prove eligibility for the loan and to secure a sizable sanction at low interest rates and other beneficial loan terms, such as low processing fees, having an excellent CIBIL score is crucial. Banks and financial institutions check CIBIL scores to ascertain a loan applicant’s repayment capacity, creditworthiness, and therefore, the terms and conditions on which to extend them a loan.Â
CIBIL score is the credit score assigned by TransUnion CIBIL, the oldest credit information agency in India. TransUnion CIBIL assigns credit ratings based on several factors, including the type of credit an individual has, their dependency on credit, the age of their credit history, and most importantly, their repayment history. Below, we look at each of these factors in detail to study how to Âimprove cibil score above 800
Want to Improve CIBIL Score Above 800? Here Are Some Simple Tips That Will Prove HandyÂ
- Ensure a Clean Repayment History:A credit user’s repayment track record accounts for 35% of their credit score. To build a strong credit score, it is important to have a clean repayment history, with no cases of loan defaults or missed EMI payments. So, if you want to better your CIBIL score, one of the first things you must get into the habit of doing is paying all your loan EMIs and credit card bills on time. You can even set up monthly reminders for a day before your due date. If you miss an EMI payment for whatever reason, clear it before the next due date to reduce damage. Doing these simple things will certainly allow you to increase your CIBIL score in no time.
- Maintain a Low Credit Utilization Ratio and Ensure You Don’t Across as Excessively Dependent on Credit: Being excessively dependent on credit is a red flag for lenders. People who access credit often also tend to miss paying EMIs and credit card bills on time. Therefore, people who are not excessively dependent on credit have a higher CIBIL score. To assess a person’s dependency on credit, TransUnion CIBIL takes into consideration two things: the number of hard inquiries under one’s name and their credit utilization ratio. The credit utilization ratio is the ratio of credit used to credit available through all credit cards. Ideally, a person’s credit score must never exceed 30%. In other words, you must never use more than 30% of the total limit available on your all credit cards.Â
Additionally, credit users must make sure to have limited hard inquiries under their names. This can easily be done by not applying for credit cards and loans frequently and spreading out one’s application for credit carefully. Credit users, in particular, must never make the mistake of applying for credit right after they have been rejected by a bank or financial institution. In this case, the loan borrower must wait at least a few months before applying for credit again.
- Maintain All Your Credit Cards and Old Loan Accounts: The age of an individual’s credit history also affects their CIBIL score. The older your credit history, the better your credit score will be. So, to maintain a good ÂCIBIL score range, make it a point to maintain all old loan accounts and credit cards. You can also convert your credit cards into lifetime membership cards to maintain your credit history.Â
- Make Sure to Maintain a Balance Between Secured and Unsecured Loans: Loans are of two types: secured and unsecured. Secured loans are backed by collateral. Unsecured loans, on the other hand, are sanctioned after carefully analyzing the loan applicant’s credibility and repayment capacity. Individuals who have a mix of secured and unsecured loans have a higher CIBIL score as such a mix demonstrates how to handle all types of credit.
Concluding RemarksÂ
The above tips will help you improve your CIBIL score above 800. Maintaining a score in the excellent CIBIL score range is easy if you are mindful of how you use credit and how responsible you feel towards its repayment.
