Your credit score is an essential factor lenders consider when granting you credit or loans. A low score can make it harder to obtain loans or result in higher interest rates and fees. But don’t feel sorry if your score has been low; many people face this problem. Here we’ll try to understand what is a good CIBIL score, some tips for free CIBIL score check and crucial steps for improving CIBIL score, which will increase your chances of loan approval.
What Is A Good CIBIL Score?
A CIBIL score is a three-digit number that measures an individual’s creditworthiness based on their credit history, ranging from 300 to 900. A score of 750 or above is generally considered to be a good CIBIL score by most lenders and financial institutions. It’s important to note that different lenders and financial institutions may have different criteria for assessing creditworthiness or free CIBIL score check. So, it is very important to understand what is a good CIBIL score. Some lenders may consider a score of 700 good enough, while others may require a higher score for approval.
Important Tips For Improving Your Credit Score
- Make Timely Payments of EMIs and Credit Card Bills: Paying EMIs and credit card bills on or before the due date is highly recommended to maintain a healthy credit score. It is important to do a free CIBIL score check and prioritize these payments to avoid any possible degradation in the credit score. Late or missed payments can negatively impact the credit score, making it difficult to obtain loans or other financial services in the future. Setting reminders for the due date is a good practice, as everyone today is preoccupied with numerous tasks and may need to pay more attention to payment deadlines and free CIBIL score check process.
- Refrain From Exceeding the Credit Limit: The amount of credit an individual uses can also significantly impact their credit history and credit score. It is advisable to apply for a credit card or a loan only in case of a genuine need. Taking out casual credit through credit cards should be avoided. Credit cards can be the most expensive way to obtain credit. It is easy to fall into a vicious circle of credit card payments, which can harm the credit score.
- Evaluate Your Credit Score: It is imperative for individuals to periodically review their credit scores or do a free CIBIL score check on Bajaj Finserv website or App, as it can significantly impact their ability to access loans and other financial services. Credit scores are calculated based on an individual’s credit history, and a low score can indicate that the individual may be a high-risk borrower. This, in turn, can lead to loan rejections or unfavourable loan terms, making it harder for individuals to obtain credit in the future. Individuals can monitor their credit scores by doing a free CIBIL score check regularly. Individuals can increase their chances of obtaining loans and other financial services at favourable terms by being vigilant and proactive in monitoring and doing free CIBIL score check online regularly.
- Make Arrangements to Pay Off the Debt: Planning for early closure of debt is an effective way to improve credit scores. It is recommended to make a full prepayment of the loan. To accumulate a certain amount regularly in a bank account and use that to reduce or repay the debt. Doing this can reduce the interest paid and improve their credit score. For long-term loans, lenders often offer the option to make part payments. This can be a good way to reduce liability and pay off loans early. Making part payments regularly can reduce the outstanding principal amount, resulting in a lower interest burden over time.
Read Here More: Learn How To Check Your CIBIL Score And Five Ways To Boost It
- Refrain From Obtaining Loans From Multiple Lenders: It is important to prioritize and repay existing loans before considering taking on additional debt. By prioritizing the repayment of existing loans, one can demonstrate financial responsibility and improve their credit score. Applying for too many loans at once can also raise red flags with lenders, who may view it as a sign of financial instability. This can lead to the rejection of loan applications and further damage the credit score.
Having a low CIBIL score can be a major hindrance when securing loans or credit cards. However, there are several tips that you can follow to improve your credit score. One useful tool to help you monitor and improve your credit score is a free CIBIL score check. By checking your CIBIL score regularly, you can keep track of your creditworthiness and take steps to improve your score if necessary. It is also important to note that many financial institutions offer free CIBIL score check as part of their services such as Bajaj Finserv or you can also utilize Bajaj Finserv Credit Pass services which is one of the best premium credit score check services available online. Don’t forget to utilize free CIBIL score check services to maintain your credit score and financial health.