A good CIBIL score informs a lender about the loan borrower’s credibility. It is one of the first things that a lender checks while approving a loan. If anyone has a low CIBIL score, then the most important thing they will need to know is how much CIBIL score is good and how to improve it.
How to improve CIBIL score
Now that one knows how much CIBIL score is good, a borrower must follow a few tips to improve their CIBIL score quickly.
- Paying the dues on time
Missing out on any repayment on time can badly affect the borrower’s CIBIL score. One needs to be careful and punctual enough when it comes to paying the EMIs. Delay of repayment not only takes down the CIBIL score but a borrower will need to pay penalties. ,
- Limiting the loan requests
A borrower should not take multiple loans during a fixed time period. To improve their credit score, borrowers should repay one loan completely and then take another. Furthermore, regularly repaying the EMIs for a longer period will ensure the borrower’s trustworthiness in the lender’s eyes.
- Maintaining a healthy credit mix
A healthy balance between both secured loans such as home loans and auto loans and unsecured loans such as personal loans and credit cards are suggested for a good CIBIL score. Furthermore, from a healthy credit mix, a lender will understand that the borrower has experience with all these credit types and pays all the dues on time.
- Monitoring the credit reports
To improve the CIBIL score, a borrower must monitor the CIBIL score and credit report regularly. This will help the loan borrower to identify if there are any reasons for a low score. Therefore, it will the borrower time to rectify it before applying for a loan.
- Building a good credit portfolio
Building a good credit history gradually is important for a high CIBIL score. Though, sometimes taking a loan is unavoidable but make sure to take the right kind of debt and repay it within the time. Moreover, the borrower should pay off the debts fully. While repaying a loan, opting for a settlement should be the last resort.
- Increasing the credit card limit
An important factor one should know is that using more than 30% of the credit card limit lowers the CIBIL score. Therefore, it is recommended to increase the credit card limit so that the expenditure stays within 30%.
How much CIBIL score is good
A CIBIL score should be high enough so that a lender can get an idea of a borrower’s creditworthiness. Most lenders consider a CIBIL score of 750 and above as good enough for a home loan approval.
CIBIL score ranges and their implications-
- 350-550: Very Bad
- 550 – 650: Fair
- 650 – 750: Good
- 750 – 900: Excellent
To check CIBIL score online one can visit and log in to the CIBIL portal and click on ‘Get your CIBIL Score’. After selecting a subscription plan one will be verifying their identity by entering the PAN number and ID proofs. The CIBIL score will be available after paying the subscription fee.
Several financial institutions extend pre-approved offers on different credit instruments like loan against property and home loans. These preapproved offers improve and fasten the whole loan application process. Eligible candidates can check their pre-approved offers by providing a few details on the lender’s website.
Now that one knows how much CIBIL score is good, improving the CIBIL score will not be overwhelming anymore. While taking a home loan, one can opt for a longer tenor so that the EMI will be lower. Therefore, paying the debts each month will be easier. Furthermore one can also increase his/her credit limit to improve the CIBIL score.
