In this article, we discuss about how to improve your CIBIL credit score. Therefore, we define following rules at below, which must be followed at the time of credit.
CIBIL defaulters are required to follow these rules for improving their report. Here are as follows:
1. Delay or late payments: One of the most reason of bad credit score is delay or late payments. If an individual gets a loan from banks or financial institutions for fulfill their requirements, then he will require for paying their monthly installments on time. If he delay their payment on another date and if he miss the payment completely, then the ranking of his credit report will go to downward from their position. He can save only a few part of money but later on, he will require to pay the interest of late payment and his credit report also affected badly. Therefore, if you want to improve your CIBIL report, then you should have paid their payment on time and being more disciplined from now.
2. High utilization of credit cards and loans: If an individual have carried lots of credit cards for something to show off, then his credit report will goes down absolutely because carrying a credit cards and loans above the natural limit is a huge negative effect on the credit rating. It shows that too much dependence on credit cards in your life. Therefore, a second method to improve your CIBIL ranking is, carrying a credit cards and loans at the acceptable limit of credits. If you do not follow this rule, then you will go in a big problem.
3. Utilizing your full credit limit each month: If an individual have a credit card and his credit limit is up to 50,000 a month and every month he utilize 40000 to 450000, it will affect badly on their credit report because banks seen your dependence on his credit card. Your full utilization of their limit can be affected badly. Therefore, utilize your credit limit up to 30 – 40% (this utilization is accepted and seen a positive way) and make sure about that, you have to maintained utilization of all the credit cards that you have.
On the other hand, if you can’t reduces his expense on credit card, then you have another option, call your credit card customer care number and ask for increasing his credit limit.
4. Higher debts of unsecured credits: Higher percentage of unsecured credit is a bad thing. Unsecured credits are such as credit card, personal loan debt and others. We do not recommend you for carrying an unsecured loan because higher percentage of unsecured credits shows that your hungriness in respect of credits and your too much dependence on credits. If you have more secured credits instead of unsecured credits, then it is a different and good thing. For example: if you have a Rs. 100000 and 80% debts is unsecured, then it is bad thing but if you have 80% debts of secured credits, i.e. education/home/auto loan, then it is normal thing. Therefore, if you want to improve his credit report, we recommend you for having a mix of credit types instead of taking a personal loan and credit cards. If you have 3 types of credits, i.e. home loan, educational loan and credit cards, then it is a good thing instead of having a 5 personal loan.
5. Being a Guarantor without making a thought: If your friend asks you to be guarantor for their home loan because he was helped you in so many things, then what would you say? We recommend you to say NO for becomes a guarantor of any loan because if you give any guarantee for any loan, his default will becomes a liability for you. It implies that, when any default in payment of installments of any loan, then the guarantor will liable for his loan and their credit score will go down. Therefore, when you being a guarantor without making a thought, you can met with a big problem in a future and your credit report will be goes down.
6. History of your credit report: Higher duration of your credit history can make a good ranking of your credit report. If you are paying your EMI’s/installments on time for last 5 years, then it could be helped you for getting a good status of your credit report. However, if you have history of last 5 months and you pay your EMI’s on time, then it could not be helped you in making a good report. Therefore, we recommend you to pay his payments on time for making a good credit report in future.