Your CIBIL Score Will Only Improve From Here
CIBIL (Credit Information Bureau (India) Ltd.) is the first Indian credit bureau licensed by the Reserve Bank of India (RBI). CIBIL keeps acquiring credit information related data from member banks and other financial institutions on monthly basis. Only after an exhaustive and in-depth analysis of the formation contained within the credit files of individuals and entities, CIBIL assigns its credit rating or the CIBIL Score.
If you want to improve your CIBIL score and do not want it to come down to lower levels then there are specific ways and means to ensure this.
Given below are ten distinctive ways; which if followed, will definitely improve your CIBIL credit score. Thereby, you would also be enhancing your overall credit worthiness:
• Avoid missing repayments and default – Avoid defaulting on loan repayments at all costs. Or at least at all instances excluding when it is truly unavoidable. This means you retain a pretty impressive credit record for yourself. No need here to mention that habitual defaulters do run the risk of a plummeting credit score rating from CIBIL.
• Avoid cutting corners – In today’s digital world, it is not all difficult for banks or other lending agencies to realize that you are only trying to avoid paying of the credit that you have availed. From the totally lame excuses to the carefully thought out move, all will be detected by the creditor in due course of time.
• Be upfront and explain the difficulty in repaying the amount – Despite the best of intentions and financial calculations, at times things do go awry and you end up cutting a sorry figure. Not to fret, as all you need to do is to approach the bank people and sincerely explain them why you are not able to pay that particular period’s loan repayment amount. They will not only suggest you the next step or so but this straightforwardness will enhance your trustworthiness and eventually lead to an impressive CIBIL score despite the default.
• Cluttering up your credit usage with umpteen applications is not a wise idea – Even if you are in dire need of external loan to purchase property, vehicle, funding education, etc. do plan it in a more phased out manner so that the lending agencies do not have to contend with multiple loan and credit requests before them. Even otherwise, things are bound to go out of control, with so many repayments in your liability list.
• Use your credit cards intelligently – Unless it is a matter of life and death, avoid using up over 80 per cent or the full credit limit that is offered to you. If you have two credit cards of say Rs. 50,000 and Rs. 40,000 respectively, and face the genuine need for a Rs. 60,000 odd credit then use both the cards; rather than using one of them to the full limit permitted.
• Declare all your sources of Income – Have faith in the decision making ability of the banks when it comes to the number of loans you require and do furnish them details of all your side incomes. It is likely that instead of the seven loans or credit requests you have made, you are cleared only four. But at the end of it all, you will be happy with your CIBIL rising credit score.
• Opt for secured loans only – For applicants, it is much safer to opt for only secure loans that have been extended against guarantees. Unsecured loans such as personal loans and credit cards are very much tricky business. Banks do not take kindly when they see unsecure loans being made almost on a whim.
• Be a bank guarantor only when you are 100% sure of the authenticity of the applicant – Your intentions may be noble. But the financial world has its own sets of clearly laid out rules and norms. The chauffeur you may have stood guarantee for a particular loan can easily run off leaving behind unpaid loan amounts and you red faced.
• Carefully study all the clauses and the finer print – It is pretty risky to hastily enter into any loan agreement even before you are aware of what is in store. Do a thorough home work and then only apply for one.
• It is unwise to run away from a defaulted loan – Despite your best intentions, there may arise a situation where because of unavoidable circumstances, you may default on loan repayments. No need to fret, just contact the lenders and explain in a straightforward manner the cause for delay or total non-payment. This alone will ensure that your CIBIL score card does not take a nosedive.