How to Increase CIBIL Score Instantly? | Credit Score Kaise Badhaye

Introduction

Today, I have got for you an interesting post on CIBIL Score. Which will answer all your questions. 

What is CIBIL Score?

How is CIBIL Score calculated?

Hope you are not making a mistake where your CIBIL Score might fall. I will answer all these questions in this Article

Whenever you visit a bank to apply for a loan, you have got to prove to the bank whether you will be able to pay within the given time with interest. 

How will you prove that you will be able to pay within the given time with interest?

Just by speaking, it won't work. Banks need your CIBIL Score which is between 300-900 and as much of your Score is close to 900, the more you have a chance for your loan to be approved. And to get the loan at a lower interest rate. In fact, in our nation, more than 79% of loans have been given to those people whose CIBIL score is more than 750.

What should be the limit for the CIBIL score?

That means, an average Indian's target should be that His CIBIL Score should never fall below 750 Now let's talk about, how your CIBIL Score is formed. 

We then approve on that basis And it is important because, under CIBIL, the loans, and obligations are termed regarding what are the current loans and obligations of the customer. So then it's easy to approve the loan. 

Whenever in your entire lifetime, buy a Loan. For eg: A car Loan, Home Loan, Education Loan, or else Credit Card A credit card is also a Loan. it is considered the worst and the most expensive loan. whichever institution that you have bought it from It is the institution's responsibility that they share the information with CIBIL

Now,

Who is CIBIL?

CIBIL is an organization, Credit Information Bureau. They have only 1 work, to calculate the CIBIL Score of every person in this nation and to generate a Credit Report. Based on CIBIL Statements, every bank trusts it. If CIBIL Score has said that your core is 750+, then you can easily repay the loan. Bank will believe it, and your loan will be passed.

If your CIBIL Score is below 750  or is hovering around 300. Then no Bank will approve your loan and even If it is get's approved then it will be based on high interest. Now I will tell you while calculating the CIBIL Score. 

What are the things that CIBIL pays attention to you?

1st thing is your Payment History. If you have taken a lot of loans in the past and you have re-paid all of them on time every month. Then your Credit Score will improve.

But If you missed 1-2 months of EMIs, then it will lower your score. You have to try and pay your loan on time so that your CIBIL Score doesn't impact negatively. While calculating the score, 30% weightage is given on your payment history.

After that comes Credit Exposure, which means how much credit have you used? For eg: You have been provided with a 1 Lakh Credit Limit. and you have utilized  INR 80,000/- from that. Then your Credit Utilization Ratio becomes 80%, which will lower your CIBIL Score. Because this proves that you are Credit hungry. You need money and there is a possibility that we applied for the new loan, then you won't be able to re-pay that. So one Safe Utilization Credit Ratio is 30%.

Whatever is your limit, you can use 30% of that. And your Score should not fall lower. Credit Exposure is given 25% weightage, whenever your CIBIL Score is calculated. Another one is Credit Type and Duration, which can also be called Credit Mix This is also given 25% weightage,  whenever your CIBIL Score is calculated.

It tells you which loans,

- That you have used in the past?

- How many loans have you used?

- How did you re-pay them?

Let's assume, that Unsecured Loans are more and the Secured Loans are less, that means your CIBIL Score is going to fall. Your effort should be that certain loans should be Secured and certain should be Unsecured.

So that you can maintain a Healthy Credit Mix and CIBIL should believe that you can handle your loans nicely and will be re-paying on time.

The 4th factor is Multiple Inquiries & few other factors as well.  They get a 20% weightage, whenever your score is calculated. Multiple Enquiries means whenever you are not applying for a loan but are enquiring about the loan at the bank.

That inquiry's information also reaches CIBIL, and CIBIL also gets to know that in the past 1 year, How many times have you enquired about the loan. Hence, If you have sent a lot of inquiries, then your CIBIL score might reduce. 

Like this, 30%, 25%, and 20%. All these 4 weights are considered, and your CIBIL Score is calculated. As I have told you, If it is more than 750, then you are in a Safe Zone. 

But If you are below 750, then you have to think about it. And If your CIBIL Score is falling down, and If you want to know 

How to improve your CIBIL Score?

If you want a home loan or car loan, if you apply for a credit card the first thing which will be checked is your CIBIL score. It is good when the CIBIL score is more and bad when it is less. The CIBIL stands for Credit Information Bureau India Limited. Cibil score is between 300 to 900. I have said greater the Civil score is good so generally, a 740 + cibil score is good and if you have an 800 + CIBIL score then you have a high chance of loan approval. If you are using a credit card for 5 years or 4 years and comparatively you make a card

today now if you close the older credit cards then your history will not appear. If you apply for a loan let's assume that you are purchasing a home and you want a home loan which is a general loan It can happen that you do not get the loan because your credit history is not appearing.

So here more your credit history is older it is good which will improve your CIBIL score So your CIBIL score improves with a good credit history if you have made timely payments of any loan or any credit card so it is good for you.

Now many people have not taken loans and credit cards so they do not have any credit history if they want to take a big loan or want to apply for a good credit card example if you want to apply for American Express then you will not get it I understand. it will improve your CIBIL score because if there is no credit history then there is no CIBIL.

If you have less than 800 or 740 CIBIL scores then what to do?

Most people make the mistake of making a credit card but this credit card affects your civil

score very much. People think that if they are paying bills timely then their civil score will be higher but they don't know if they don't see their credit utilization percentage you have a credit card limit of one lakh rupees there are many people out there who have credit card limit of 1 lakh rupees and they are spending 80 to 90 thousand monthly and if you ask them they will tell you that 5 to 10,000 limit

is left. It means if a person uses a 95% limit,

now you will say we are using the limit that is given, it's very wrong. Whatever limit you are using everything has been reported to the credit bureau. And this reporting signifies that you are depending more on credit and you are living your life on credit now this with affect your CIBIL score. because whenever you will go for taking a loan they will check your CIBIL score and they will find that you are already dependent on credit and they cannot

give you further loans.

You have to keep your credit utilization limit below 30% every time. If it is above 30% then you will realize that your CIBIL score has been affected.

Now, how do manage this utilization if the limit is 100000 and it can happen salary is more but your credit limit is 100000. If your salary or income is more you can do one thing that you can request your bank to increase your credit card limit.

Conclusion

Generally, banks increase credit card limits by offering as you are frequently using credit cards. If you accept that offer your credit card limit has been increased What will happen next if you have a 1 lakh

limit and now it is 2 lakh example if you were using 50000 it was your at 50% credit utilization it meant you are using 50% off your credit but if the limit is 2 lakh and you are using 50000 then your credit limit is 25% which is less than 30% which means it is good for your CIBIL score.

Jai Hind! Jai Bharat.