CIBIL Score Tips: What should be the CIBIL score to take a loan, know 5 ways to fix it…

Whether rich or poor, everyone needs to take a loan due to some situation or the other. Many times, in case of a sudden need for money, the loan is used as the last option. Like there is a medical emergency at home, or a house has to be built or land has to be purchased. In such a situation, we usually arrange money by taking a loan. But, if you want an easy loan, then for this you have to maintain a good CIBIL Score report.

Let us know in detail in this news what is CIBIL score and if it has deteriorated, how can it be improved.

First, know what is CIBIL score.
Credit Information Bureau India Limited (CIBIL) is a credit information company. It has a license from the Reserve Bank of India and it tracks loan-related activities of common people along with companies. Its rating is called the CIBIL score.

For your information, let us tell you that the CIBIL Score or CIBIL Rating is a measure that shows how good is your record in taking a loan and repaying it. It ranges between 300 to 900. 300 to 600 means you are very bad at repaying the loan. At the same time, a CIBIL score of 750 to 900 indicates that your loan repayment record is excellent.

If your CIBIL score gets spoiled then you can fix it like this
Suppose your CIBIL score range is less than 750, then you may find it difficult to get a loan. You may not even get a credit card. But, the good thing is that the CIBIL score can also be improved. Let us know five ways to improve your CIBIL score.

1. Repay your loan on time
If you do not repay the loan on time, it hurts your CIBIL score. You should always pay EMI on time because delay in it not only attracts penalties but also reduces the credit score.

2. Maintain good credit balance
You should have a good mix of secured loans like home loans and car loans with unsecured loans like personal loans and credit cards. Banks and NBFCs generally prefer those with secured loans.

If you have more unsecured loans (unsecured loans affect cibil score), then you should pay them off first to have a good credit balance. If you have used a credit card, try to pay it before the due date. This can be a good plan to improve your credit score.

3. Do not leave outstanding balances on credit cards
If you have used a credit card, try to pay it before the due date. This can be a good plan to improve your credit score.

4. Avoid becoming someone’s loan guarantor
You should avoid opening a joint account (joint account rules) or becoming a guarantor of someone’s loan. If the other party defaults, your CIBIL score may also be affected. Also, you should not take multiple loans simultaneously. If you want to take a second loan, try to finish the first one. This will also help in increasing your credit score.

5. Use credit cards within a limit only
If you do not fully utilize your credit card limit, you can improve your credit score quickly. Try to spend only 30 percent of the credit limit every month. Spending more than this shows that you spend money without thinking and your dependence on debt is high.

Also, while taking a loan, you should choose a long period for repayment (loan repayment tenure). This will keep the EMI and you will get a longer time to repay the loan. Your chances of defaulting will also be less and your CIBIL score will automatically improve.