A credit score is given to you by RBI-approved agencies such as CIBIL, based on the financial discipline you follow with the banks and other lending institutions. If you have made your credit card payments on time and are punctual with your EMIs, you will have a high credit score. But if you pay your fees late and don’t pay your EMIs on time, it shows that you don’t have financial discipline. A credit score ranges between 300 to 900. Anything between 700 and 900 is considered good, and anything below 550 is considered a bad CIBIL score. The CIBIL score is formed based on the feedback the lending institutions and the bank have given to the CIBIL agency. The input is whether we pay on time for our credit card payments, EMIs, and loans.
Following are the ways you can maintain a good CIBIL report:
Pay your credit card payments:
To score a good CIBIL score, you need to get a score of 700 or above on the CIBIL report. For that, you have to make sure you have paid your credit card payments on time and have no credit card debt. Also, make sure you don’t spend more than 30% of the money you have on your credit card; spending more than that can hurt your credit score.
Paying back your loans:
Paying the interest on your loans on time is very important for an excellent CIBIL score. If you pay back your interest on time and clear your loans in a stipulated time frame, your CIBIL score rises. The bank notices how good you are at removing your loans and informs the agency, which increases your CIBIL score.
Multiple loans and credit cards:
Applying for multiple loans or credit cards in a short time hurts your CIBIL score. Avoid doing that, as your scores will come down. You will often be offered to apply for a new credit card, but doing so is not a good idea.
The older your card is, the better it will look on the CIBIL report. Unless you have some reason wthatyou cannot avoid, don’t apply for a new credit card. Also, avoid multiple loans ,as that shows that you are desperate for money, and that will cause problems in your CIBIL report. Instead, go to websites that offer numerous options for loans. Here, you can see what type of loans or credit cards you are looking for and then apply for them.
Conclusion:
In a nutshell, to maintain a good credit score, always make sure your bank dues are fulfilled on time. You should check whether you have paid your credit card debts and loan interest on time. Don’t apply for too many credit cards and multiple loans at one time. This will affect your score. Review your payment dues and credit card debts and pay on time. A CIBIL score above 700 is considered good, so your credit score falls in the bracket of 700 to 900. Check out your CIBIL score on Finserv MARKETS for free.
Pro tip: Set a reminder for your credit card’s due date andd try to make the payment at least a week before the due date.
