Improve Your CIBIL Score In 2016
If you are sitting there wondering how you can improve your credit score, you have come to the right place. Here are 5 super-simple ways you can make this happen. The sooner you apply these actionable points, the better things will look for your CIBIL score.
If you are unaware what that score does, it basically determines how worthy you are of credit. Reflecting on it are your debt handling capabilities, which we will discuss piece by piece in the following five points. Your aim is to attain at least 750 out of 900 on your CIBIL score.
1. Proper Credit Card Usage
It is not as obvious as it seems, because there is a technical side to this point. Credit cards are the main way to improve your CIBIL score. Reckless purchasing can be bad for card history and by extension, your CIBIL score. When circumstances start to spiral, you can expect to fall in debt. This in turn means you can probably only manage to pay the minimum every month. All this negatively impacts your CIBIL score. This 2016, use your card moderately and with aforethought and you will have done right by your CIBIL report.
2. Utilization Limit
Yet another crucial factor that impacts your CIBIL score is credit utilization, which is simply a ratio of the amount of credit that you are provided and how much of that credit you are using. As long as this credit utilization remains in the 30-40% range, you will see a healthy CIBIL score. If it crosses, 30% you are making things hard and if utilization exceeds 40%, you are adding to your credit score burdens.
3. On-Time Debt Payment
This point cannot be stressed enough; it could well be the most important of the lot. Whatever your chosen or preferred line of credit – be it credit cards or personal loans – 2016 is as good a time as any to change the way you view debt. Simply refuse to miss EMI dates for loan repayments. Pay off any credit card pending amounts within the billing cycle. Be determined, diligent, and creative to make these simple principles happen no matter what. Your CIBIL score will automatically improve and you will certainly be granted access to credit in future. Suffice to say this point is the crux of a healthy CIBIL score rating.
4. Immediate Credit Card Payoffs
Suppose you, like millions of other Indians, are neck-deep in credit card debt. Do not let 2016 intimidate you and make you feel as though you lost. You can still make a comeback but it is going to take time and effort. Start by taking wise and thought-out shortcuts to conclude as many dues as you can. Liquidate assets if you must, and find help and support in friends, relatives, and family. Credit card debt is worse than any loss of face with the people you love and care for. Such actions will reflect positively on your CIBIL score, showing that you are doing something about your debt. While it may not yet add to that score, any small progress will be favorable on a lot of fronts, and that is enough for the time being.
5. Track Your Score & Report
Do not let things lie as they are. Keeping an eye on your CIBIL score and report will be beneficial not to mention inspiring, especially if you have set strong financial goals for 2016. Even if you are 100% certain that you are doing things properly, track your score and report. Errors, mistakes, and inaccuracies need not particularly come from your end. Delayed or wrong entries made by other factors/parties can affect you and delay corrections. In this time, those blunders can and will lower your CIBIL score and you cannot afford to wait until they are rectified. Your creditworthiness hangs in the balance. Remember that you are one in several million CIBIL score names and no special treatment will be granted you even based on a mistake that another person or program made. Such is the world we live in and you can win simply by keeping track of your score and report. It is a small chore to stave off a gigantic problem.