Worth reading tips to improve your CIBIL Score

January 16, 2018 | Author: | Posted in Finance

Mr. Venkat works in an IT organization in the IT expressway and wanted to buy a luxury villa in OMR. When he approached the bank for a home loan, they rejected the application due to a low CIBIL Score. He was unaware of how much this score would impact on availing a home to buy his dream home. Homebuyers knowing the CIBIL score impact is mandatory when it comes to home buying. Let’s explore on how to improve your CIBIL score for those who are an inch away from getting a home loan.

Tips to improve your CIBIL Score

Check for errors: Having a good credit history improves the CIBIL score. People might have paid their entire unpaid amount within due date. Sometimes, due to the administrative errors, it still shows as the current due. This might happen if you do not check it properly. This could have a negative impact on your CIBIL score.

Pay all your outstanding bills: Paying off all the outstanding bills can actually improve your score increase faster. Clear off the balances on time i.e, before the due date. This will help you hugely to have a positive impact on the score. Paying off the bills regularly and managing it to pay within due date states a good behaviour. A good financial behaviour is a first and foremost thing any lender looks for in a customer. This builds trust and he/she can assure you a loan seeing that you have the potential to pay the EMIs on time.

Always try to pay the amount 5 days before the due date. This shows that you take the payments-on-time seriously.

Wait till you apply again: If your home loan application has been rejected already, do not apply to other banks immediately. This is because as you keep on applying to other banks, they will reject your application again. The fact that your previous rejections are already recorded on your credit is unerased. So wait till you apply another time to improve your CIBIL score.

Limit your usage of credit card: Always remember to utilize your credit limit to half of your full limit. Avoid using the credit card to its full limit. Limit the usage of the credit card if it reaches 50% of your credit limit. For example: if you have a credit limit up to Rs.50, 000 a month, then try to utilize your card only up to Rs. 25,000. Using more than 50% indicates that spending wisely is not your forte. Also, it signifies that you are unable to keep enough money aside to repay your debts. This negatively impacts your CIBIL Score.

Don’t try to close your loans or credit cards: At times, people, at last, decide to settle on the credit card or loan they already have. They approach the bank and ask them to close the debt for a particular amount. This amount is lesser than the actual due amount. Banks approve these requests, but settling on this choice might end up impacting your CIBIL score negatively. This stops the bank to offer new loans in the future.

Limit your borrowing to a decent amount: If you apply loan for nearly to the credit limit, then your score comes down as this activity shows a credit hungry conduct. The wise thing you should do is to avail a loan amount within a credit limit and avoid availing till you reach the limit.

Pay your current loan: If you are already struggling to pay the previous loan amount, then approach the bank to restructure the EMI debt to make it easier for you to pay faster. This might impact your CIBIL score in case you are planning to avail a fresh home loan in the future.

By taking these things seriously, Mr. Venkat slowly improved his CIBIL score and now he is a part of gated community villas in OMR.


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About Author
Varsha Reddy writes about Home buying, Home Loan, Home decorations, Home improvements, renovations. Also on topics based on Interior designs, contemporary and industrial styles.


Varsha Reddy writes for Alliance Group where she helps people in Home buying, home decorations, Home Loan, Home Improvements, Renovations and others.

This author has published 7 articles so far.

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