CIBIL Score: Use these 5 strategies to raise your CIBIL score

 CIBIL Score: Use these 5 strategies to raise your CIBIL score

The bank will make you a specific sort of offer based only on your CIBIL score. This also determines how much you get; if your score is poor, you can have to pay a higher interest rate or the bank might authorize a much less amount than what you have requested.

Before applying for a loan from a bank or other financial institution, a person's CIBIL score is examined. A customer's history of taking out loans and making timely repayments is shown by their CIBIL score, which is a three-digit figure. The bank will make you a specific sort of offer based only on your CIBIL score. This also determines how much you get; if your score is poor, you can have to pay a higher interest rate or the bank might authorize a much less amount than what you have requested. Sometimes a loan is even denied because of a poor credit score. A large sum is also granted at low interest because of the strong CIBIL score. In other words, maintaining a good CIBIL score is required for a loan. In one of its blogs, Bank of Baroda offered regular people advice on how to maintain a good CIBIL score.

Use caution while making loan or EMI payments.

Being careful while making loan or EMI payments is the best strategy to maintain a good CIBIL score. Frequently, individuals have money in their accounts but are unable to make timely payments for various reasons. It is preferable that you use features like auto pay and auto debit to ensure that the loan is deducted from your account on a certain date.

Avoid taking out many loans at once.

Aim to only take out one or two loans concurrently. If you have a large debt outstanding, cutting down on other needless spending can benefit both your finances and your credit report. Multiple loan applications are a sign of a weak financial situation for the consumer. This has an impact on CIBIL score. Try to take out a second loan in such a scenario only after paying off the first one.

Put secured loans first.

It would be preferable to take out a gold loan rather than a personal loan if you are in need of money and have already converted credit card debts into installment payments. Actually, the quantity of secured loans in a multiple loan account determines your score. A gold loan won't affect your CIBIL score since it is regarded as a secured loan.

Don't use more credit than you have.

The credit card has a limit that is determined by your capacity to pay back the loan. This implies that the bank uses this to inform you of your limit. It would be preferable in this case if you consistently stay below this limit in order to gain the bank's confidence. This will assist raise your CIBIL score so the bank perceives you as a disciplined client in terms of your expenditure.

Continue to review your credit report.

When a consumer applies for a loan, they often learn their CIBIL score. Nevertheless, owing to system errors, the impact of loan repayment sometimes appears on the score either later on or not at all after the loan is repaid. In such a scenario, periodically check your CIBIL score and, upon loan repayment, ask for a new loan only if you believe this payment has improved your CIBIL score. You may get in touch with the prior bank whose loan you paid back if you have any questions.