Your CIBIL score is one of the most crucial eligibility criteria that lenders check when sanctioning unsecured credits. A minimum score of 750 is essential to apply for unsecured credits like personal loans and credit cards. Since these credits are collateral-free, a high score acts as a security for the financial institutions. It tells that you have handled all your previous credits responsibly and have lesser chances of defaulting. Hence, improving your credit score is critical, and some of the ways to do so are mentioned below: 1. Avail a Credit Card Using a credit card is one of the easiest ways to do so. However, you need to be responsible when using the card. 2. Always Pay The Total Amount Due A credit card statement displays two payable amounts –
3. Keep The Credit Utilisation in Check Your card comes with a pre-set credit limit, which is the maximum amount you can borrow or spend with it. Using the entire limit makes you credit hungry. Hence, try to keep the utilisation ratio low. Usually, using only 30-50% of your card limit improves your score. 4. Refrain From Applying For Multiple Credits Financial institutions conduct credit enquiries when you apply for a loan. These checks lower your score. Hence, refrain from applying for too many of them at once. Use these points in your favour to improve your CIBIL score. A high score will also enable you to avail the best interest rates while applying for a personal loan. Must Read: 4 Steps to Improve Your CIBIL Score
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |