Do you need a personal loan with a low interest rate? So, you walk into a local bank or lending institution to apply for one. You have all the valid documents you require to get started with the loan application process. Everything seems absolutely fine until you hear of “CIBIL Score”.
Whether it’s your first time applying for a short term personal loan or you’ve already got one a few years ago, you know and understand the essential role a CIBIL score plays in your life. You thought you would secure the loan hassle-free, but you found out that it is only 600. Is there anything that currently seems more disappointing than a poor CIBIL score? We don’t think so.
If your score currently sits at 600, this blog will help you know “How to Increase CIBIL Score From 600 to 750?”
A perfect CIBIL score, represented by a 3-digit number, is considered no less than a golden ticket to securing loans and getting credit cards at a competitive interest rate. Aside from reflecting strong repayment behavior, it is the first thing evaluated by banks, lending institutions, or NBFC (Non-Banking Financial Companies) when determining their eligibility to apply for a loan or credit card.
A CIBIL score reflects the individual’s financial rating. It signifies how responsible and serious an individual is in making loan repayments or paying outstanding credit card bills on time. If you have a higher CIBIL score, the chances of receiving a loan or credit card approval will be greater. A poor score will prevent you from availing any financial products available.
What is a Good CIBIL Score in India?
Your credit report, generated by CIBIL (Credit Information Bureau India Limited) by collecting information about your credit history from banks, lending institutions, and NBFCs, says a lot about your past credit history. Also called “TransUnion CIBIL”, this three-digit score allows them to determine one’s financial credibility.
The CIBIL score plays a vital role in a person’s life, as it holds greater value and works to their advantage if it is above the required threshold set by a lender or an NBFC. This score is generated by CIBIL. It ranges between 300 and 900, and a score of 750 or above is considered excellent by lenders or financial institutions when approving the credit card or loan application.
A great CIBIL score offers you numerous advantages, including:
- Low interest rates
- Favourable loan conditions
- Vast credit opportunities
However, if the CIBIL score is not what it should be, securing a loan or getting the credit card you want can pose challenges to you.
Know More: What is a Good CIBIL Score
CIBIL Score Table
CIBIL Score Range | Rating |
300 – 500 | Poor |
550 – 650 | Needs Attention |
650 – 699 | Satisfactory |
700 – 749 | Good |
750 – 900 | Excellent |
As mentioned above, a good CIBIL score is crucial. This three-digit number makes you eligible for a loan or credit card. If you want to renovate your home to add to its beauty or travel to your chosen destination in the coming days, a personal loan can help serve your purpose. This is when you know that you are running short on funds. But, you would not be able to secure one if your CIBIL score is not what it should be, or as required by lending institutions.
Some Useful Tips to Increase CIBIL Score From 600 to 750
Is your credit score 600? Here is a list of some important tips that will help you with “How to Increase CIBIL Score From 600 to 750?”
1. Make Timely EMI Payments
Missing your monthly payments, or EMIs, has consequences. They are serious compared to receiving calls for payment recovery or paying penalty charges being imposed. Every time you miss paying an EMI, the credit bureau is directly reported, adversely affecting your credit score.
Keeping this in mind, the first thing you must do is to ensure that you make EMI payments on or before the due date. An easy way not to miss your monthly installments is to keep a reminder. You can even set all your payments to be deducted from your account on auto-debit. Doing so will help you stay on top of your EMI due date, and you will never miss an EMI. Moreover, it will help you boost your CIBIL score.
2. Keep Your Credit Utilization Low
The credit utilization ratio is the percentage of the borrower’s total available credit being used currently. An individual uses when compared to the total credit limit. Some individuals have a perception that they can easily make use of their credit cards to reap the maximum benefit by utilizing the whole limit. A higher ratio means that relying heavily on credit can impact your credit score unfavourably.
Make sure that you keep spending on your credit card below 30% of your available limit. Avoid overspending, but you can increase your card limit. When you reduce your credit utilization, you can immediately increase your credit score.
3. Regularly Check Your Credit Report
You know and understand what your history of repayment looks like when you check your credit report. Moreover, this report can help you find out if there are outstanding loans (if any) affecting your CIBIL score or bringing it down.
Above all, it can assist you in identifying if the credit bureau has reported any inaccurate information in your credit report. Doing this plays a crucial role, as there is a possibility that you could be doing everything right to maintain a great credit score. However, your CIBIL score is not improving due to the faulty reports being sent to the bureau.
If you come across any such discrepancies, contact the bureau right away and get them resolved.
4. Avoid Multiple Credit Enquiries
A hard enquiry is made to the credit bureau by the bank or an NBFC every time you apply for a personal loan or credit card, and this reflects in your credit report.
If you have made numerous hard enquiries within a minimal timespan, it can harm your CIBIL score. Lending institutions may consider you a high-risk borrower. So, they may think twice about granting you a personal loan or credit card.
If you are looking to boost your credit score, make sure that you refrain from applying for several loans or credit cards in a short period.
5. Avoid Settling Your Loans
In any given situation, if you cannot make timely outstanding payments, the bank may offer a solution by settling the loan. They will ask you to make a small one-time payment. Never consider this option for settling your loan or credit card. It will cause a negative impact on your credit score.
Ensure you make payments of the outstanding dues to lenders or financial institutions at the earliest, so you can close the loan repayment promptly. Other than that, you must diligently plan loan acquisition and repayment to avoid facing situations that affect your CIBIL score considerably.
6. Maintain a Healthy Credit Mix
Do you yearn for a good credit score? Then you must focus on building a good repayment history. And to build a good history of repayments, maintaining a healthy credit mix plays a vital role.
Ensure you always take a blend of loans (secured and unsecured). Most significantly, you need to make all your loan repayments on time.
When you do this, it not only helps you build a robust credit profile but also boosts your credibility as a borrower. It signifies that you have a great experience in managing different kinds of credit products and can be relied on.
7. Settle Outstanding Debts
You must settle your outstanding debts or repayments immediately if you are serious about boosting your CIBIL score. Every time an equated monthly installment is not paid promptly, it is reported to the credit bureau. This way, your credit score can be drastically reduced.
If you are not able to make the complete payment right away, ensure that you at least start paying a minimum due amount across every credit card against which you owe money. Furthermore, you can speak with the lending institution if they are in a position to give you an increase in the loan tenure. That way, it becomes easier for you to manage the EMIs.
Significance of Having a Good CIBIL Score
A CIBIL score of 750 and above is an ideal score to apply for a loan or credit card. This shows lenders or non-banking financial companies that you can be trusted and have the capability to repay the loan on time. A good credit score increases the possibility of getting quick approvals on loans at a competitive interest rate. Don’t forget that the minimum CIBIL score to secure a personal loan is 750.
Having a perfect credit score is highly recommended as it provides you with plenty of great benefits, including:
- Quick and easy loan application approval
- A variety of loan deals
- Access to a higher loan amount
- Possibility of availing a low interest rate
- Scope of negotiating the rate of interest with the lender to offer you an affordable rate
- No restrictions on terms and conditions for securing the loan
- Instant loan approvals
How Can I Maintain My CIBIL Score?
Here is a list of some useful tips that will help you maintain your CIBIL score:
1. Make All Your Loan Repayments in Full on Time
Do you know the most effective way to build, maintain, and increase your CIBIL score over time? It’s being disciplined about every loan repayment and due on your credit card. When you start behaving sensibly when making loan repayment and settling your credit card dues, you can easily maintain your credit score to what it is for a long time.
On the contrary, not making a payment of your loan EMI, defaulting, or even getting your loan “settled” could be highly harmful to your CIBIL score.
2. Avoid Multiple Loan Applications
It is wise to compare your options carefully when applying for a loan or a credit card. But avoid applying for several loans or credit cards at once. That is because doing so could be detrimental to your CIBIL score.
3. Check Your Credit Report Regularly
If you want to maintain your credit score for the long term, you must monitor your credit report for at least 30 days. That is because it could help you spot any mistakes, deceptive transactions, or inconsistencies in time. If left unchecked, any of them could severely affect your credit score.
Final Thoughts
With these 7 steps mentioned above, you know how to increase CIBIL score from 600 to 750. Making significant changes in your repayment behaviour will help improve your credit profile. You can get attractive interest rates, minimal documentation, quicker loan approvals, etc., on loans you’re planning to take in the future. Improve your CIBIL score so you can get the most out of the instant access to cash whenever you need it.
Also Read: Personal Loan For CIBIL Score of 550
Frequently Asked Questions
Making your loan repayments and settling your credit card dues on time will help you improve your CIBIL score to 750 from 600.
Absolutely! Maintaining a clean repayment history, tracking your credit report regularly, and paying your loan EMIs on time will help you increase your CIBIL score immediately.
If you find any mistakes or flaws in your credit report, ensure you report them to the credit bureau right away.
A CIBIL score of 750 can help you get approval for a loan or credit card. However, different lending institutions have different eligibility requirements to offer loans or credit cards.
Increasing your CIBIL score depends on several factors. These include your current CIBIL score and the steps to take to boost it. Visible improvements in the CIBIL score may be observed in around 6 months if you display a consistent positive credit behaviour.
