How to Get a 750+ CIBIL Score and Access the Best Credit Offers
When you first approach a bank or NBFC for a loan or to apply for a credit card, they always assess your creditworthiness through a credit score. This allows them to understand your past financial behaviour and lend responsibly. This score is provided by credit departments licensed by the Reserve Bank of India (RBI), namely Experian, Equifax, Centre for Research in International Finance (CRIF) High Mark and Credit Information Bureau (India) Limited (CIBIL). Each credit authority follows different scoring models and algorithms to generate a credit report. While all four are reliable, lenders generally prefer CIBIL when considering an applicant for their creditworthiness.
Key Points:
- A credit score provided by CIBIL is called a CIBIL score.
- Your CIBIL score says a lot about your financial health and your ability to manage debt and finances.
- A CIBIL score contains information such as your past loans, credit card dues and your repayment history.
- It helps banks, NBFCs, and other independent lenders assess your creditworthiness and eligibility for availing financial services such as credit cards and loans.
- A good CIBIL score may give you access to favorable credit, including reduced interest rates on loans, longer loan tenure, and higher limits on your loan, as well as better credit opportunities.
- Before applying for a new credit or loan, you can check your CIBIL report online to prevent unnecessary rejections.
- Maintaining a good CIBIL score is all about financial prudence and can be done with a few responsible financial practices.
Here’s Why You Need to Have a Good CIBIL Score: 750 or Above
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A CIBIL score is a three-digit number, ranging from 300 to 900, that reflects your creditworthiness and financial behaviour and influences whether the lender approves or denies your loan application. A higher score improves your chances of credit approvals with better lending terms. Generally, a CIBIL score between 750 to 900 is considered an excellent rating by most lenders.
Get Loans Approved in No Time
A strong CIBIL score demonstrates a responsible credit history, making you a low-risk applicant. As a result, lenders are more likely to approve the loan application swiftly, allowing borrowers to address financial requirements promptly. In several cases, applicants with excellent credit scores are pre-approved for various credit facilities, which significantly reduces the lengthy verification process, ensuring faster disbursals and a seamless borrowing experience.
Avail Lower Interest Rates
A high score indicates a responsible repayment history and financial discipline. Applicants with higher CIBIL scores are more likely to enjoy competitive or preferential interest rates as compared to those with an average or poor credit score. This significantly impacts repayments and allows borrowers to save substantially on their Equated Monthly Instalments (EMIs), thus reducing the overall cost of borrowing.
Apply for a Longer Tenure
Lenders are more confident in offering longer loan durations to borrowers with a good credit history. Choosing a longer tenure will help lower monthly payments, offering borrowers more flexibility to manage other financial obligations without feeling a burden.
CIBIL score is an indicator of your long-term financial health. If you are planning to apply for a loan or credit anytime soon, improving your CIBIL score can prove strategic. A calculative step towards improving your score will take time, consistency and discipline.
How to Increase CIBIL Score
- Pay Your Dues on Time: Timely payment is one of the most important aspects of maintaining a healthy CIBIL score. Whether you have overdue credit card bills, loans or instalments, late payments, or missed dues can cause a considerable change in your score; every payment is recorded. Make it a habit of paying your bills before their due dates. Timely payments indicate financial stability and help boost your creditworthiness.
- Avoid Multiple Credit Accounts: Applying for multiple loan inquiries in a short period of time can indicate financial instability or aggressive borrowing behavior and is considered a hard inquiry to assess your creditworthiness. Multiple hard inquiries can cause the credit score to dip and may reduce your chances of approval. Instead, do your research, check your eligibility before applying and focus on managing your existing credit responsibly.
- Use Credit Cards Sparingly: A great way of improving your CIBIL score is to keep your credit utilization low. Most financial advisors suggest not to use more than 30 per cent of your overall credit limit. A low credit utilization score indicates that you are not heavily reliant on credit cards in your daily life and can manage your finances.
- Maintain a Healthy Credit Mix: Lenders prefer borrowers with a balanced credit portfolio, including both secured loans, such as home loans or personal loans and unsecured loans. A well-maintained balance helps demonstrate that you can handle different types of credit responsibly. To improve your credit mix, consider taking out a personal loan; however, make sure you can manage repayments before taking on additional debt.
By considering these tips on how to increase your credit score, you can tap into better financial opportunities and a hassle-free loan borrowing experience.
