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Cibil
TopCIBILImprovementFactores

TopCIBILscoreimprovementfactors

Whatisacreditscore?
Acreditscoreisanumberthatstandsaperson'screditworthiness.Thisisastatisticallycompilednumericvalue
thatlenderswidelyusetoascertainhowlikelyapersontakingaloanwillpayitback.Thecommoninference
beingthatifapersonhasbehavedresponsiblytopaybackhisloansinthepast,hewillcontinuetodosointhe
future.
Pastbehaviourinpayingbackloansiscalledcredithistoryandapersonscreditworthinessisbuiltaroundthat.
InIndia,CreditratingandInformationBureauofIndiaLtd.(CIBIL)isthestatutorybodythatmaintainsa
databaseofcreditstandingsofindividualsandcommercialentities.
InIndiathecreditscoreforanindividualrangesbetween300900.AgoodCIBILscoreisconsideredtobe750+
inIndia.Thehigheritis,thehigheraborrowerscreditstanding.

Howcreditscoresgobad
Somuchofcreditrelateddataisshroudedinmisinformationandsecrecyandpeopleareoftennotadvisedtouse
theircreditsourcesresponsibly.Sopeoplemighthaveactedinignorancebutendupwithabadcreditscore.
Thereareseveralfactorsthataffectcreditscoresandtheirimportancevaries.Butthereisgeneralagreementon
factorsthatgointodevelopingcreditscores.
Impropercreditutilization:Creditutilizationissimplytheratiobetweenhowmuchcredityouaresanctioned
andwhatpercentageofityouareusing.Thismeanswhatistheupperlimitofallyourcreditcardsandwhere
youstandintermsoftheirusage.Ifyouuseaveryhighpercentageofyourlimit,yourcreditscoremayturnbad.
Historyofpastrepayment:Thefirstandforemostthingthatalenderlooksforisyourpastbehaviorin
repayingdebt.Ifyouhavepaidallyourdebtsinfullandintime,yourcreditstandingisgood.Butifyouhave
defaultedoryourpaymentsareirregular,itwillhaveanegativeimpactonyourcreditscore.
Lengthofdebtservicing:Howlongyouhavebeenavailingcreditandservicingitisalsoadeterminantinyour
creditscore.Newapplicantsforcreditusuallyhavealowcreditscorethanpeoplewhoarealreadyusingcredit
forawhile.
Therightmixofcredit:Creditratingagenciesalsolookatwhattypesofcreditandwhetheryouhavegotthe
rightmix.Availingmultiplesourcesofcreditlikecreditcards,personalloansandsecuredloansisabetteridea
thanrelyingonanysourceexcessively.
Newcreditapplications:Thefrequencyatwhichyouhaveappliedforanewcreditalsohasabearingonyour
creditscore.Lenderscanactuallyseehowmanytimesyouhaveappliedandhowmanytimesyouhavebeen
approved/rejectedsoapplyingwaytoomanytimescanreflectbadly.

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Top5creditscoreimprovementfactors
Asaborrower,youcanmaintainaresponsibleandpunctualapproachtowardspayingyourloansthatinthe
longruncanimproveyourcreditscore.Herearetop5stepsyoucantaketoachievethis:
1.Checkyourcreditscorebeforeapplying:SinceCIBILletsconsumersgetcreditscoresdirectlyand
instantlyontheirwebsite,youcanalwayscheckyourscorebeforeapplyingforafreshloanorcreditcard.
BypayingonlyRs.470,youcangetitelectronicallyorbypost.Thishelpsintwowaysyoucanbesure
thattherearenonegativefactorsonyourcreditscoreandconfidentlyapplyandsincelenderscanalsosee
whichotherlenderhasrejectedyourapplication,restrainfromgoingaheadifyourscoreisnotinthe
desiredrange.
2.Bepunctualinyourcreditcardpayments:Donotdefaultonyourcreditcardorloanpaymentsasitcan
createanegativeshadowonyourcreditworthiness.Youcanfallbackonyourfriendsandrelativesfor
shorttermloansjusttomeetthesedeadlinesofcreditcardpaymentsorloaninstalments.
3.Ifyoudonothavecredithistory,createone:Somefirsttimersmaynothaveacredithistorytofor
lenderstogoon.Forthemthecreditscoreiszeroorzilchandthatswhybanksandfinancialinstitutions
mayhesitatetosanctionthemaloan.Buttheycangetaroundthisproblembyopeningafixeddepositand
thentakingacreditcardagainstit.Bymakingregularpaymentsonthiscreditcard,theycanimprovetheir
creditscore.
4.Spreadusageacrossdifferentcardlimits:Ifyouhaveseveralcreditcardsbutuseonlyonetospend
extensively,yourcreditscorecanbeadverselyaffected.Itiswisertospreadyourexpenditureoverseveral
creditcardsinsteadofusingalargerpercentageonasinglecard.
5.Donotraisedisputesunnecessarily:Ifitisacaseofunduecharges,fraudulenttransactionsorinterest
ratesthatcropsuponyourcreditcardstatements,contactthecustomercaredepartmentofyourcredit
cardissuer.Butifyouvemadealatepaymentandarechargedpenalinterest,donotunnecessarilyraise
disputes.Ifyoudoso,creditcardcompaniesmayfreezeyourcardandthatcanaffectyourcreditscore.

HowdoesCIBILkeeptrackofyourcreditscore?
Whenyouspendonyourcreditcardormakealoanrepayment,yourbankkeepsarecordofit.Thebankor
financialinstitutionsharestheserecordswithCIBILonamonthlybasis.ThisgoestogenerateyourCredit
InformationReport(CIR)orscorewhichotherlenderscanusetodetermineyourcreditworthiness.Thus,CIBIL
isthedefinitiveagencytohelpassessriskprofilesofborrowers.Itlendsadegreeofsafetytobanksand
financialinstitutionsinitslendingprocesses.

Howdolendersusecreditscores?
Intheloanapprovalprocess,theTransUnionScoreandtheCreditInformationReport(CIR)bothgeneratedby
CIBILplayacrucialrole.Thisinformationisavailableonlineandlenderscandirectlyaccessthesedatapoints
toseeiftheloanapplicantqualifies.Thescoreessentiallyisaglanceatanindividualscredithistory,his/her
currentloancommitmentsandrepaymentability.Afterthesechecks,lendersmayaskborrowersfordocuments
likeidentityproof,addressproofandproofofincomesothattheloanmayfinallybesanctioned.
ReadMoreonCIBIL
CIBIL/CreditReportChecklist
GoodhabitscanmakegoodCIBIL
HiddenfactsaboutCIBILScore
CIBILTransUnionScore2.0
CIBILMarketplace
CorrelationbetweenCreditRatingandDebt
ResolveCIBILErrors
HowCIBILisImportant
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CIBILScoreVersesReport
SolutionsforyourCIBILCreditReportProblems
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CIBILScore
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MissingpaymentaffectsyourCIBIL
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ImpactofLatePaymentonCIBIL
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FAQs:CIBIL/CreditScore
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KnowthefactorsthataffectCIBILScore
GoodhabitscanmakegoodCIBIL
MistakesThatcannegativelyimpactyourCIBILScore
SolutionsforyourCIBILCreditReportProblems
CIBIL/CreditReportChecklist
ReasonsforLoanrejectionotherthanCIBIL
HiddenfactsaboutCIBILScore
CIBILScoreforHomeLoan
CIBILScoreforPersonalLoan
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CIBILScoreforCreditCard
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CIBILScoreVersesReport
CIBILMyths
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HowLongIttakesToImproveCreditScore
Badpracticeswhichleadtobadcreditscores
WhatdoesDPDonyourCIBILreportstandfor
CIBILTransUnionScore2.0
Treadwithcautionbeforecosigningahomeloan
FactorsDecidingYourCreditScore
HowToReadYourCreditReport
CorrelationbetweenCreditRatingandDebt
CIBILMarketplace
DoesPersonalLoanandCreditCardHelpsCreditScore?
CreditMonitoring
HowyourCreditScoreisused
Importanceofgoodcreditscore
Personalloanforcibildefaulters
Lowcreditlimitdespiteahighincome?
HowMakingMinimumPaymentsCanAffectCreditScore?
HowtoremovenamefromCIBILDefaulterlist?
TherightCIBILscorewillnevergetyourloanrequestrejected
CanIgetaloanwithacreditscoreof550?
ApplyingforaHomeLoan?ImproveyourCreditScore
CouldalowCIBILScoreaffectCarLoan?
WhatdoesyourCIBILScoresignify?
HowagoodCIBILScorecanimproveyourjobprospects
CanaCreditCardImproveYourCreditScore?
CreditScoreMattersatRetirement
TestyourFinancialFitness
TheImportanceofCIBILScoreforMeetingFinancialObjectives
CIBILError
Thingsyouwon'tfindinCreditReport
CanyouremploymentgetaffectedbyyourCIBILscore?
StepstoDisputeMistakesonYourCreditReport
TheLinkBetweenMCLRandCIBILScore
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notreviewedorendorsedbyrepresentativesoffinancialinstitutionsaffiliatedwiththereviewedproducts,unless
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