Improve Your CIBIL Score And Affect Employment Opportunities
Rejection can be heartbreaking—or it can be more good than bad. It offers an opportunity to iron out the grey areas. Overcoming grey areas, in turn, ensures more success than failure comes your way in future.
A failure in a job interview is no different in this regard. You can use it to smarten up your candidacy. To do that, you obviously need to put in a lot of hard work. First, however, you must determine why you are being rejected.
Without knowing that, your attempts at improvement won’t be much better than shooting in the dark—and so would be your results.
For instance, someone who is getting rejected because of lack of core skills will not gain much by polishing his communication skills. Similarly someone with a poor CIBIL score (yes, now in India too employers frequently take a candidate’s credit history into account while evaluating his candidacy) will fail to effect a nod if he made a better eye contact the next time.
If your CIBIL score is poor, you will benefit more from putting into action the following tips than anything else.
Tip #1 Check your CIBIL report for inaccuracies
Inaccurate entries in your CIBIL report can hurt your score badly. Peruse your report to check if it contains any incorrect information. Correcting wrong information is a 2-step process. Go to the CIBIL website and fill out the On-Line Dispute form. Upon receiving your request, CIBIL will investigate and take the necessary action and after things are fixed, it will improve your CIBIL score.
Tip #2 Pay out any outstanding amount
Are you carrying forward some outstanding amount each month? Late payment reflects poorly on your ability to handle credit, and in turn brings down your score. Without any delay, pay out the outstanding amount. Equally importantly, in future always pay your balance in the same billing cycle.
Tip #3 Keep your credit utilization percentage within the acceptable range
Paying your credit bills on time alone is not sufficient to lift your CIBIL score—you must also use your credit cards smartly.
One factor that CIBIL looks at while evaluating your credit worthiness is your credit card utilization, which is defined as the percentage of the credit limit you use each month. For example, monthly usage of INR 80,000 on a card having a maximum limit of INR 1 Lac will result in 80% usage.
Users usually report a different credit utilization ratio on different credit cards they hold, and that’s perfectly fine. What is not fine is a high credit utilization ratio even on a single card. Anything over 50% is bad while a usage in vicinity of 80% is extremely unhealthy. The most favorable range is 30%-40%.
It is necessary to note that a lower credit utilization ration doesn’t win you any extra points. Lenders don’t want to see you using a very small part of the available credit; what they want, instead, is that you use a substantial amount of available credit each month and then pay the balance in full in the next billing cycle.
So if you use one card significantly more than others, you should spread the usage almost evenly across all cards and this should improve your cibil score.
Tip #4 Remove your name from the defaulters list
You cannot boost your CIBIL score with your name featuring in the defaulters list (at least not for next 7 years, the time period for which your name will appear in the list after defaulting a loan).
Bite the bullet, cut corners if you have to, but pay out the loan in full at the earliest. That’s the only way you can improve your score.
Tip#5 Reduce the percentage of unsecured loans
Credit card debt is an unsecured loan, so is a personal loan. On the other hand, a home loan, which is taken against collateral, is an example of secured loan.
Too many unsecured loans are seen as an unhealthy dependence on credit, and that’s why it reflects poorly on your CIBIL report. You must ensure that your loan portfolio is a healthy mix of both secured and unsecured loans.