CIBIL: How to improve your credit score with a mortgage loan?

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CIBIL score. By raising a home loan or taking a loan against a property, you can lengthen your credit history, which is an important factor in credit scoring models. And a longer credit history usually reflects positively on your creditworthiness.

Payment history: Making regular mortgage payments shows to credit bureaus that you are a responsible borrower. This positive payment history can have a significant impact on improving your credit score. Credit mix: Mortgage loans add diversity to your credit profile, which can positively impact your credit score.

Banks like to see a mix of different types of credit, such as installment loans and credit card debt. ALSO READ: CIBIL Score: Suspecting unauthorised inquiries on your credit report? 5 things you must do immediately Credit utilisation: While a loan on property doesn't directly impact your credit utilisation ratio (which is the amount of credit you're using compared to your total credit limit), it can indirectly impact it by reducing the percentage of available credit you're using if you're consolidating debt or not using other forms of credit excessively. Overall, responsibly managing a mortgage can be a positive factor in improving your credit score over time, but it's essential to make payments on time and manage all your credit obligations wisely.

If you are often denied credit or offered unfavourable terms when applying for loans or credit cards, it means your credit score is lower than you realise. If you have started receiving collection notices or calls from debt collectors, it’s an indication that you have unpaid debts that have been sent to collections. This can significantly damage your credit score and make it challenging to obtain credit in the future.