Be it the online credit card application or a personal loan application and beyond, the importance of a CIBIL score should be known to a prospective borrower. This is among the most significant factors to get a credit card or personal loan approval. You can get a large credit card limit and lower personal loan interest rates if you have a higher CIBIL score.
But what if you have a lower CIBIL score and want to apply for an online credit card or a personal loan at a lower rate? Your application may be rejected.
Hence, the first thing here would be looking for steps to improve your bad credit score. Read on for more information on how to improve your low CIBIL Score:
- Clear your existing debt
When you have outstanding debt, it is noted on your CIBIL report, and unless you clear it, it will continue to affect it negatively. Hence, the first basic method of improving your credit score is to clear all types of outstanding debts. You can do that by repaying your debts within a specified timeline or make prepayments to foreclose the loan. Also, using your credit responsibly and smartly may help you.
- Always ensure to pay your EMIs on time, every time
Come what may, you should make sure to make EMI payments on time. If you don’t do that or pay your EMIs but not on time, then it may lead to pulling down your CIBIL score. You should be informed to know that if you make delayed EMI payment, even if it is once or twice, it gets recorded in your CIBIL report. Many people forget their credit card and other loans’ EMIs due dates and miss payments. To avoid that, you can set the automatic transfer of a specified amount on a day of the month from your bank account to ensure timely payments. You can also use the online credit card app of your lender to make hassle-free payments on the go right on your mobile phone. It will help you avoid bouncing off the EMIs and paying late charges and even boosting your CIBIL score.
- Limit your credit utilization
If you go ahead and start utilizing too much credit on your credit card, then it may showcase that you are not able to live in line with your income. Thus, the next thing that you can do is using the limits and still ensuring to stay below the limit. The next point will be using a credit limit only that you will be able to repay. The best case would be ensuring to using credits less than half of your total income amount. Another thing will be paying your credit card amount in full and not minimum due to avoid paying too much than what you actually used.
- Report discrepancies in your credit report if any
Sometimes, you may see some discrepancies and errors in your credit report. For instance, you may have a lower CIBIL score because your lender may not have informed CIBIL about your latest payment details. Hence, the good thing would be checking your CIBIL score on a regular basis to note any discrepancies.
If you are able to follow these tips to boost your credit score, then you may be able to get quick loan and credit card approval without issues.