How to improve CIBIL score? Here are 8 effective ways
Bills on time: Payment history is a significant factor in your credit score. Ensure you pay all your bills, including credit card bills, EMIs, and utility bills, on time. Setting up automatic payments or reminders can help you stay on track.
Cut down your credit utilisation ratio (CUR): You should aim to keep your credit card balances low relative to your credit limit. Ideally, try to keep your credit utilisation ratio below 30 percent. Paying down existing debts can help lower this ratio.
Avoid applying for new credit: Each time you apply for credit, it triggers a hard inquiry, which can temporarily lower your credit score. Limit new credit applications, especially if you're planning to take out a significant loan soon. Diversify your credit mix: Having a mix of different types of credit accounts, such as credit cards, loans, and mortgages, can positively impact your credit score.
However, only take on credit that you can manage responsibly. Regularly monitor your score: Keep track of your credit score regularly to monitor your progress. Many banks and credit bureaus offer free credit score monitoring services.
Address negative items: If you have any negative items on your credit report, such as late payments or defaults, work on resolving them. This may involve negotiating with creditors or setting up payment plans. Keep old accounts open: Closing old accounts can shorten your credit history and potentially lower your score.
If you have old accounts in good standing, consider keeping them open to maintain a longer credit history. Seek professional help: If you’re struggling to improve your credit score on your own, consider seeking help from a credit counselling agency or financial advisor. They can provide
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