What to do to improve your Personal CIBIL Score?

Posted by poonam dambare on October 3rd, 2018

What to do to improve your Personal CIBIL Score?

What to do to improve your Personal CIBIL Score?

CIBIL Score is the backbone for your financial capabilities, when it comes to the loans and other lending opportunities. You must remember that every lender has some parameters, which they follow while lending you a loan, and it differs from one bank to another. However, in most cases, there’s much similarity among all. Wherever they differ, the common point for all of them is the CIBIL Score. It’s the CIBIL Score of yours, which every lender for at least once check on their part, to assess you and your repayment capability along with the repayment history.

What’s the CIBIL Score?

The CIBIL Score is a sort of report card of your financial history, as issued by the CIBIL Agency. The CIBIL Score mentions is based on the maximum score of 900, which is marked in between 300 and 900. The closer is the CIBIL score near to the maximum, the better it is. This CIBIL Score is an indication of the Credit history of a person, and it depends on various factors, which will be discussed later on in this article.

How Does CIBIL Score impact?

The CIBIL Score is a clear indication of a financial history of a person and thus, is an indication of how trustworthy a person is in terms of financial repayment capabilities. The person needs to score high in order to build a sense of confidence among the lenders, that their loan will not go default. The closer is the CIBIL Score towards the 900 mark, the better it is. With the better CIBIL Score, you can get the better deals for your loan requirements, and even have a reduced chance of the application for loans, getting declined.

What factors affect CIBIL Score?

There are several factors, which contribute to the CIBIL Score and these factors, are the crucial ones in the overall improvement or decline of the CIBIL Score. If you have a low CIBIL Score, and are looking for the ways for the improvement of the CIBIL Score, you must know what factors are the salient points in the CIBIL Score calculation and how CIBIL Score is calculated.

  • The repayment history of the applicant: Carrying a total weightage of around 35% while in the calculation of the CIBIL Score of a person, this is an important aspect to maintain a good CIBIL Score. In fact, its the repayment history of a person, which tells a lot about how things have gone in the past, with the person over repayment of several dues and bills.

  • The credit balance available with the applicant: With the overall impact of around 30%, this is the second most important aspect, which plays a pivotal role in the calculation of the CIBIL Score of a person. The credit balance is an indication of how much need you are in for your credit availability. The credit balance is calculated based on two factors; one is the credit limit, while the other is the credit utilization. The credit limit is an indication of how much credit is available to you or sanctioned to you, while the credit utilization is the money available with you after spending a certain part of your credit limit. Thus, the term ‘Credit Utilization ratio’, which indicates that how much balance is outstanding on your credit card and other dues?

  • The amount of time for which you have used credit: Another important factor, which contributes a total of 15% in the calculation of the CIBIL Score, the total amount of the time, for which you have used the credit, is an indication of how responsible are you in terms of handling loans and other payments.

  • New credit application or liability: This factor contributes a total of 10%, while in the calculation of the CIBIL Score of a person. The more you apply for the credit, the more it implies that you are in need of the credit, and thus negatively impacting your CIBIL Score. :

  • Credit mix: Having a significant portion as 10% while in the calculation of the CIBIL Score, this Credit mix is the indication of how much mix type of credit available with you. With the mix types of credits like Unsecured and secured loans, can help you scoring better in your CIBIL report.

What you need to do to improve your Credit Score?

As, we have discussed several factors, which plays significant role in the calculation of the credit score, now it’s the time for the steps, which you should take for the improvement of the CIBIL Score. Here are they:

  • Repayment of Credit Card Dues: It’s one of the most important aspects, in negatively affecting the CIIBIL Score of a person. While, there is no no time for the people to pay attention to their families, do they have enough time to pay their credit card bills well on time? We don’t think so! In fact, if you really want to avoid the negative impact of using a credit card on your CIBIL Report, you have to pay all dues and bills, well on time. If you are looking to improve your Personal CIBIL Score, follow this step, with no excuse. You can auto set the payment option for your credit card dues, in case you are out of time.

  • Pay EMIs well on time: If you are carrying a loan with you, you need to pay all your EMIs well on time. Paying all your EMIs on time, implies that you are handling your duties of repayment very well, and this act in favor of you, by helping you in the improvement of the Credit Score. Remember that the timely payment of all bills can ensure your trust worthiness in the eyes of the lending agencies.

  • Low Credit Utilization Ratio: An important factor in the CIBIL Score, which most teenagers are seen not following, is the Credit Utilization Ratio. The credit Utilization ratio, as mentioned is the indication of how much balance is outstanding on your credit card and other dues. Always remember a golden rule, when it comes to the Credit Utilization ratio; keep the ratio below 30%. If you keep your credit Utilization Ratio below 30%, you will accumulate good reward points in your credit report.

  • Avoid application of new credit all of a sudden: Too many applications for the credit all of a sudden imply that a person is in need of the credit, and thus raises an eye of suspicion among the lenders. As soon as you apply for the Credit, your bank will ask CIBIL Agency about your credit core, and thus your details get recorded, every time, you apply for it. Since, you imbibe a feeling to them, that you are accredit hungry person and secondly, you have the chances of your score going down, if you are well prepared to repay them.

  • Have a credit mix: Having just a credit card, will not help you in the improvement of your CIBIL Score all of a sudden. Having a mix of credit, will be the helping hand, in your journey towards the improvement of your personal CIBIL Score. Try to get a credit, both secured and unsecured. Since, Credit Cards are considered as unsecured credits, you can have a mix bag of both unsecured and secured credit. Keep a good balance of both types of the Credit.

  • Dispute inaccuracies: Keep checking your CIBIL Score at a regular interval of time. In case, you feel there’s an error in your credit score calculation and you deserve better score in your report card, raise the issue against this to the credit agency. In case, you notice any wrong information in your CIBIL Report, immediately get it sorted out with the bank and CIBIL agency.

  • Continue with the oldest credit card: Many consider old credit cards as completely useless. But in fact, the old credit cards, for which you have paid the bills and all your dues well on time is a CIBIL Score booster for you. In fact, a credit Card account which has a long history and has been managed well, gives a much needed impetus to the improvement of the CIBIL Score. Thus, the longer you continue with the Credit card of such a status, the better it is.

  • Increase your credit limit: The more is the credit limit available with you, the more is the credit worthiness of yours in terms of the banks and other banking agencies. Whenever the banks offer you with the enhanced credit limit, aspect it graciously, as it offers you some credit score in your credit report. Remember that the increased credit limit is not an implication that you need to spend more.

  • Get a Secured Card: Getting a secured card with a certain fixed deposit can help you in the improvement of the credit core, which is especially beneficial for the people who have a low credit score. There are several banks and other leading agencies, which offer a secured card against a fixed deposit of a certain amount. Get is and help improving your credit score in the process.

  • Take Short Term Loan: Taking a short term loan and paying off its entire EMIs well on time and successfully carrying it and with utmost responsibility can help in improving your Credit limit. Don’t mind taking a short term loan, if you are in need of some money and in the process can improve your score.

  • Avoid being a guarantor to someone’s loan: Have you ever been a guarantor to someone else loan? If you have been, did you make sure that the loan is being paid in the process, as the defaulting on any such loan, will have an effect on your credit score, too. Thus, our advise is to avoid being part of any such stupidity, unless the other person is very near to you, and even then make sure the person paid the entire loan back to the lending agency. Avoid being a guarantor to someone else’s loan.

What’s the Good CIBIL Score?

If you are wondering, if what the good CIBIL Score is, here’ the table for your help:

Credit Score

What does it mean for your credit health?


Excellent credit score, thus indicating that you have been good in the repayment terms and thus as a result, you have the likeliest chance to get approval for the loan of all kinds, at the best interest rates applicable. You will no difficulty in getting all sorts of loans like unsecured and secured loans, subject to meeting all other conditions as laid down under various loan types.


A very Fairly good score, which is a reflection of fair loan repayment in the history. At the same time, you are entitled to the various loan types, at the best price. Also, you can get the secured loans with ease, depending on other eligibility criteria. For certain unsecured loans, the bank may go deeper in analyzing various other aspects.


This is the score, which reflects your irregular behavior while making payments of dues and other financial responsibilities. You are more likely to face difficulties in getting loan and you may face a significant credit check before approval. Higher rate of interest on loans and even you might to put a good collateral for the secured loans.


Very low score, which is the lowest in the bracket and is an indication of over leverage or many irresponsible behavior in repayments. You will face the most difficult situation in getting approvals for any kind of loans from any well established banks and lending agencies.

The Credit Score is an important aspect in a person’s financial journey, especially in case; he/she is looking to borrow loans in the near future. Improving the Credit Score with the careful steps, is always recommended, as who knows, when emergency situations arises, and you might need financial help form banks!

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poonam dambare

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poonam dambare
Joined: September 28th, 2018
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