A credit score measures a person’s creditworthiness, indicating their ability to repay debt. A credit card CIBIL score is typically a numerical value derived from the individual’s repayment history and credit records across various banks and financial institutions.
Maintaining a score is essential for your financial well-being as it determines your eligibility for credit cards and low-interest loans. If you’re seeking to improve your credit card CIBIL score quickly, here are some effective techniques to follow:
Pay Loan EMIs on Time
Paying EMIs on time or before the due date helps you maintain a good credit score. Missing or delaying a single loan instalment negatively impacts your credit profile. For this, you can always set reminders on your devices or calendar. You can also add standing instructions for auto-deduction from your designated bank account.
Clear Credit Card Dues on Time
Upon missing a due date, it will reflect in your report in the section called Days Past Due (DPD) section. Plan strategically to pay off your credit card balances to avoid significantly impacting your CIBIL score. If you cannot complete the payment by the due date, you should at least clear the minimum due.
This way, the issuer does not report the non-payment of total dues to the bureau. The outstanding balance will incur interest over time, adding to your financial burden. Therefore, it’s wise to pay your full bill on time, if you can.
Track Your Credit Report Regularly
The Credit Information Report (CIR) plays a significant factor in the lending process. It contains the record of all your past credit, loans and defaults. Lenders check it to analyse your credit behaviour and score. Thus, keeping an eye on it is crucial to improve your CIBIL score.
Here are the steps you can follow to improve your credit health with your CIR report.
Step 1: Get Your CIBIL Score Regularly by Purchasing a Plan
Opt for a subscription plan to get your CIBIL score and credit report for only ₹550 and access the report within 3 business days.
Step 2: Check Credit Report
Here are the details you need to check after getting a credit report:
- Number of open accounts on your report
- Accounts reported as ‘closed’ by the lending institution
- Any open accounts that are not yours
- Discrepancy in personal details
Step 3: File for Dispute
You can quickly resolve any discrepancies by following CIBIL’s Dispute Resolution Process. Open accounts stated incorrectly can inflate your credit exposure, and by following this process, you can address and resolve any disputes.
Limit Credit Utilisation
You should not use more than 30% of your available credit for a good credit score. Exhausting your maximum credit indicates a dependence on external financing and bad credit management. Instead, you can use your existing credit limit smartly to maintain your cash flow.
For example, say you need lump sum funds for an urgent requirement. You can either opt for a personal loan for a credit card loan. Both will temporarily increase your credit utilisation ratio. As you pay the EMIs on time, your debt decreases in both cases.
Once you pay credit card loans on time, it restores your credit limit. Thus, knowing how to get a loan on a credit card can help you maintain a good utilisation ratio.
Use Secured Credit Cards
You can obtain a secured credit card with a fixed deposit as collateral when struggling to maintain your credit score. With an FD-backed credit card, your score is not the primary factor in approval, allowing you to obtain it faster.
Once you have a secured credit card, you can use it responsibly and pay your bills on time. Rebuilding your credit score may take time, but it will be worthwhile in the long run.
Avoid Closing Old Credit Accounts
Old credit accounts build your credit history. Your credit history is a timeline of your financial transactions, including borrowing and repayment. Credit age, also known as the length of credit history, refers to how long you’ve had credit accounts, which is essential for your credit score. Your creditworthiness improves as your credit accounts age.
If you are looking to improve or rebuild your credit, consider the One Credit Card. This card is popular for its unique features and benefits, offering a balance of rewards and opportunities to build credit. Its highlighting feature is the 5X reward points on the monthly top two spending categories.
Additionally, it provides various benefits, including travel perks, dining privileges, and cashback rewards. You can also use the card’s app to keep track of your credit account. Responsible use of this card with timely payments and keeping your balance low can help boost your CIBIL score. Apply now and use it responsible to build a positive credit history.