What can be done to raise a low credit score? Follow these 5 tips

Your chances of getting loans and other forms of credit are greater the closer your credit score is around 900.

A credit score is an unique three-digit number determined by the credit bureaus’ study of your financial history and credit history.

The score—which is available in the range of 300 to 900—describes a person’s creditworthiness. Your likelihood of obtaining a loan from a bank may be impacted by a poor credit score.

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Your chances of getting loans and other forms of credit are greater the closer your credit score is around 900.

A credit score of 700 or higher is regarded as favourable. It typically takes between 18 and 36 months of credit usage to reach a decent credit score because the score rises gradually.

When applying for a bank loan, your credit score is of the utmost importance. Before accepting a loan, a lender or financial institution will review your credit score or report when you apply.

Your credit history from banks, credit bureaus, and non-banking financial institutions is documented in your credit report (NBFC).

A low credit score suggests that you might have missed payments on EMIs or credit card bills. In such circumstances, banks can decline to lend to you.

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There are several ways to raise your score, such as:

  • Always make EMI (Equated Monthly Installments) payments on time or earlier. Don’t forget to pay your credit card bills by the due dates.
  • It is suggested that having a healthy credit mix of secured loans (like mortgages and car loans) and unsecured loans (like credit cards and personal loans) will help you raise your credit score.
  • Think about requesting new credit only when you truly need it. Lenders get the wrong idea when you ask for credit frequently, and taking on extra debt will lower your credit score. By paying off a loan first and only then applying for another, you can raise your credit score.
  • Keep an eye out for any anomalies in your credit history throughout the year. Incorrect updates to the data can occasionally happen at credit bureaus. In order to prevent your credit score from being impacted, you must request that your lender update the credit bureau with the correct information in this situation.
  • By choosing a loan with a longer term and a lower EMI, you can also raise your credit score. This will give you a longer payback period with lower EMIs. You would hardly ever forget to pay an EMI in such circumstances.
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Do you plan to apply for a loan?

It would be beneficial to verify your CIBIL score if you were considering doing so.

When approving your loan application and fresh credit request and deciding on the terms to offer, lenders take into account your CIBIL score.

In many circumstances, having a high CIBIL score makes it easier for you to get a loan and may even result in cheaper interest rates. If your CIBIL score is high, you may also be eligible for a loan for a bigger sum.

Your credit score should always be known to you. Checking before submitting a loan application can assist you avoid sending a request that has a high likelihood of being rejected.

How to check CIBIL Score?

It is feasible to finish the process online in a matter of minutes thanks to the abundance of platforms that provide free CIBIL score checking services.

To check your credit score, you can either visit the CIBIL website or use alternative tools and services offered by financial institutions. Both options are free.

You must complete a short form with your information. These comprise your name, birthdate, ID evidence, contact information, home address, and financial information.

When you have access to your credit report and CIBIL score, check for any errors and review the factors that impact your score.