As per the Reserve Bank of India, it is mandatory that all financial institutions check the credit scores of potential individuals for every type of loan or even credit card at the time of evaluation. Although there are tons of other factors that determine eligibility, your credit score is one of the most important factors.
Stashfin, one of the top personal loan applications, offers such loans with just a few taps and determines the amount of the loan based on the credit score of the borrower.
However, if you find yourself in a situation where your credit score is not lucrative, there are many actionable steps you can take to enhance your CIBIL score swiftly. Today, let’s delve into effective strategies that can help you expedite this process.
Understanding CIBIL score
It is simply a three-digit number running from 300 to 900 and is a crucial indicator of your creditworthiness as well as financial health. This score is completely calculated on the basis of your credit history, repayment patterns, credit utilization, credit types, and inquiries made by lenders.
If you have a high credit score, it clearly represents your strong creditworthiness, making you a quite attractive prospect for lenders. This is because it determines your personal loan eligibility, stashfin credit cards, etc., often influencing the rate of interest and credit limits offered to you. Therefore, regularly monitoring and maintaining a healthy credit score is very crucial for financial stability and access to favourable lending options.
It includes details of your credit accounts, their financial age, and payment patterns as well. So, a longer positive credit history generally results in a higher score which ultimately helps in availing the loan easily.
Repayment history and behaviour
Timely payments impact your score in a positive manner. Therefore, any defaults or late payments can have the opposite effect.
This basically measures the ratio of your credit card balances to the credit limits. Therefore, keeping this ratio below the bar of 30% clearly demonstrates responsible credit usage.
Top tips to increase Credit Score
Check Credit Report
In order to increase your score, the first and foremost thing you should be doing is to check your report regularly. It is a good idea because it will tell you two crucial things that are essential to your credit score. Firstly, it will show the defaults or delayed payments that have brought down your score, and secondly, it offers information supporting the reason behind the low/high credit score.
Fix up your credit card balance
Ideally, keeping your score above 750 is considered good but rather essential. Although it depends on organizations as well as benchmarks set by various organizations, if your credit score is low, you better rectify it. Spend as much as you can quickly repay within the billing date, as unpaid dues pull your score to the ground.
Dispute Inaccuracies, if any
Ensure that you dispute errors immediately after reviewing your CIBIL report or if you disagree with a particular transaction made through the vendor. Keep in mind that it’s not a good practice to apply for new credit without resolving old issues, as it will affect your score.
Timely EMI payments
If you are wondering how to improve your credit score immediately, you should probably make sure that you pay your EMI Calculator on time. This is considered one of the most important things, as CIBIL looks into it while gauging your credit ratings. Therefore, timely repayments of EMIs and bills can keep your creditworthiness intact.
Enhancing your CIBIL score requires a proactive approach and disciplined financial habits. Timely payments, minimizing credit utilization with time and diversifying credit types are the top vital strategies.
At Stashfin, we recognize the significance of a robust credit score in securing a personal loan.
Read More: Personal Loan Despite a Low Credit Score?