5 ways to maintain a good CIBIL score. CIBIL score determines the credit history of a person. Credit score ranges between 300 to 900.
What are the 'Five ways to maintain high civil score'? In this article, you will know the best tips to maintain good credit scores.
Five ways to maintain a good credit score: Whenever banks or any other financial entity lends you money, the first and foremost thing they generally do is to check your CIBIL score. CIBIL stands for Credit Information Bureau India limited which is used by banking and financial companies to check the borrower’s credit history. Due to lack of awareness most of the people cope up with bad credit scores which create problems to get credit from banks. To minimise your problem we have come up with an article which will tell you ‘5 Ways to maintain a good CIBIL score’.
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| 5 Tips on How to Maintain a Good CIBIL Score |
If any individual got a bad credit score then it may lead you towards financial loss. This is the reason why you should check your CIBIL score frequently. All people should inspect and track their credit score so that they can maintain a good or healthy CIBIL score. Their credit score can fall due to many reasons, so it is our responsibility to know them and act accordingly.
Before knowing ways to maintain good credit scores, let us know ‘What is CIBIL score?
What is CIBIL Score?
Whether your loan will be approved or not, it totally depends on your CIBIL score or credit score. CIBIL score which is a three digit number shows how responsible you are with your borrowed money. CIBIL or credit scores are determined by your credit history. If you have a high credit score then this will amplify your chances to get your loan or credit approval. A hiigh CIBIL score denotes high creditworthiness while low represents low creditworthiness. All lenders will have doubts to approve your loan application if you have low CIBIL or credit score.
CIBIL scores are maintained by a credit rating company known as Credit Information Bureau (India) Limited. The main purpose of CIBIL credit rating agency is to collect, process and generate the credit scores for the customers who take credit or loans from financial entities like- Banks, NBFC, NABARD etc.
5 Ways to maintain a good credit score
Maintaining a good credit score is crucial for anyone looking to make a major purchase, such as a car or a house, or for anyone looking to take out a loan. A good credit score can also help you qualify for lower interest rates and better terms on loans and credit cards. Here are 5 ways to maintain a good credit score:
Pay bills on time
One of the most important factors in maintaining a good credit score is paying all of your bills on time. Late payments can have a negative impact on your credit score, so it's important to stay on top of your payments and make sure they are made on or before their due date. To make sure you don't miss any payments, set up automatic payments or reminders on your calendar.
Keep credit card balances low
High credit card balances can also have a negative impact on your credit score. Try to keep your credit card balances low by paying off as much as possible each month and limiting your spending. It's also a good idea to pay off your credit card balances in full each month to avoid interest charges.
Limit credit inquiries
Each time you apply for credit, it shows up as an inquiry on your credit report. Too many inquiries can lower your credit score, so try to limit the number of credit applications you make. Before applying for credit, check your credit score and credit report to make sure you're likely to be approved.
Check your credit report regularly
Review your credit report regularly to ensure that all of the information is accurate and that there are no errors or fraudulent activity. You can get a free credit report once a year from each of the three major credit reporting agencies.
Use credit responsibly
Finally, use credit responsibly by only applying for credit when you really need it and using it to build your credit history over time. Avoid maxing out credit cards or applying for too many loans at once. And, it's always a good idea to have a budget and stick to it, to avoid overspending.
By following these 5 tips, you can help maintain a good credit score and keep your financial future on track. Remember, a good credit score takes time and effort to build, but with a little bit of discipline and planning, you can achieve it and maintain it.
How to maintain Good Credit Score: Conclusion
Currently, many Indians are facing the consequences of poor credit scores due to a lack of understanding and knowledge on how to improve it. It is important for individuals new to credit to realize that a credit score is a crucial aspect of their financial well-being. While the term CIBIL score may be familiar, many may not fully understand its importance and impact.
A bad credit score can lead to financial setbacks for an individual. Even those with good credit scores should be vigilant by regularly checking their credit reports, as inaccuracies or errors can lower their score. To avoid this, it is crucial to educate oneself on CIBIL and the various ways to improve one's credit score, ensuring that there are no obstacles in accessing credit.
To maintain a good credit score, it's important to pay your bills on time, keep your credit card balances low, and limit the number of credit inquiries made on your credit report. Additionally, it's a good idea to check your credit report regularly to make sure that all of the information is accurate and that there are no errors or fraudulent activity. Finally, try to use credit responsibly by only applying for credit when you really need it and using it to build your credit history over time.
How to Maintain Good Civil Score: FAQs
Q1- How to maintain good credit score?
Ans- 1. Pay your bills on time, 2. Keep credit card balances low, 3. Limit Credit inquiries, 4. Check your credit report regularly, 5. Use credit responsibily.
Q2- How to increase CIBIL score from 300 to 750?
Ans- Following the following points-
- Lower your Credit Utilization ratio
- Close your old account
- Improve your history of payments
- Don't inquire about credit cards
- Payment of EMIs on Time
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