Every lender asks for a high cibil score when you apply for a loan. Let’s discuss how to increase cibil score from 500 to 750. A Cibil score of 500 is considered very low and a cibil score of 750 is considered a good cibil score to get any loan.
When you apply for any loan or credit card then your cibil score is considered first. Approval or rejection of your loan depends upon your cibil score. Not only affects your approval or rejection of your loan, but it also affects your rate of interest for your loan.
CIBIL – is stand for Credit Information Bureau India Limited. CIBIL is nothing just a credit rating agency. It is the most trusted company which generates credit reports.
Let your cibil score is a little bit down then the rate of interest will be higher as compared to if your cibil score is high then your rate of interest will be low. This can prevent you to get fast approval on your loans.
All banks and financial institutes use CIBIL scores for approving financial products.
It is very easy to get any financial product if your cibil score is more than 720. A lower than 720 cibil score is not considered good. You may also face issues with fast approval for your loans.
But don’t worry, your cibil score can be changed. Just need to consider and implement a few points.
CIBIL scores vary from 300 to 900. CIBIL score above 740 is considered very good and above 800 is considered excellent.
Some Special Tips To Increase Cibil Score From 500 To 750.
It looks hard to increase cibil score from 500 to 750, but now sit back and follow the given tips. Definitely, your cibil score will be increased to 750.
1)- CLOSE YOUR LOW OUTSTANDING LOANS-
While your outstanding amount is very low. Still, it will be considered on your cibil, and it will lower your CIBIL score. So if your outstanding is very low clear the remaining amount. You can also pay on time loan but closing the loan will show a closed loan on your cibil. It will also increase your loan amount eligibility. Closing a loan before the tenure shows your financial condition is good and you can get easily approval for your next loan. Of course, it is one of the best way to increase cibil score from 500 to 750.
NOTE- Take the NOC after closing the loan. Sometimes maybe you closed the loan and it shows active on your cibil report. So then you need to send proof of them.
2)- YOUR EMIs SHOULD BE ON TIME-
It is well known you have to pay EMIs for your existing loans. But if you do not pay your EMIs on time then it will show delayed payment with the number of days too. As the number of days for delayed payment increases your cibil score goes down.
If you have made any delay payment or any overdue then clear it. After clearing all these and paying all EMIs on time, your cibil score will increase soon to 750.
3)- CONTROL THE USE OF CREDIT CARDS-
Use your credit card when it is urgent. Using credit cards frequently shows you are unable to live on your income. So due to this your cibil score goes down. It is also most important don’t use your cards totally. Try to use the credit cards for half of your salary before the end of the month if possible. Don’t use your credit card as much you can not pay in a few days.
To increase your CIBIL score don’t utilize your credit card more than 30%. Because when you use more limit (80-100%) then it is considered that you are very dependent on credits/loans. Due to this banks don’t want to give loans because they consider you might not be able to pay your loans properly.
If you have utilized your cards in large amounts and now you are unable to pay for that, just convert them into a personal loan. By this, you have to pay a fixed amount for given tenure and your amount will be closed. APPLY TO TRANSFER YOUR CARDS TO A PERSONAL LOAN.
Transferring your credit card to a personal loan increases your loan eligibility and also helps you to increase cibil score from 500 to 750 rapidly.
NOTE- don’t delay your credit card bill more than 6 months otherwise you will not be able to get any loan for many years.
4)- DON’T CLOSE OLD CREDIT/LOAN HISTORY-
Let you have taken a new credit card and you had also an old credit card then don’t close your old credit card. Old loans or credit cards show the lender’s trust in you. This helps to increase the CIBIL score. This shows your long credit history. If you close old cards it may not show on reports.
5)- TAKE A LONG TENURE LOAN-
Take a long-term loan this increases your credit history long. Also, you have to pay less EMI, so can be paid easily and you shall not be on the defaulter’s list. One more benefit of your long-tenure loan is you can take a top-up easily.
6)- CHECK YOUR CIBIL REPORT REGULARLY-
There may be some error in your cibil report. Like – you paid any overdue or delayed payment in your loan but the lender has not updated CIBIL. Then your cibil report will show that overdue/delayed payment while you have paid. So check your report regularly. If you get any error in your cibil then inform your lender as well as cibil company.
Sometimes it also may be that you have closed any loan and still showing it running. That is the reason you must take your NOC after closing your loan.
To get a report you can go to cibil.com and check your reports regularly.
7)- TAKE SECURED AND UNSECURED LOANS IN A BALANCED WAY-
If you have not taken any loan or credit card before, your cibil report will not be generated. Your cibil score will be zero. If you take only unsecured loans (personal loans, credit cards) then your cibil score will not increase. Also, you shall be considered as a risky customer for banks because you don’t have any secured loan.
If you have both secured (home loan, auto loan) and unsecured loans then your cibil score will increase. Just you have to pay your EMIs on time. Creating a great history increases your cibil score rapidly.
8)- MINIMUM LOAN INQUIRIES-
Before approving any loan bank verifies the number of loan inquiries in the last 6 months. To keep your cibil score high take one loan at one time and take the other when you pay successfully first.
When your credit score is low then don’t create enquiry regularly in decreases your credit score. And you know very well it is not so easy to increase cibil score from 500 to 750 if you enquire about loans regularly.
9)- DON’T SETTLE ANY LOAN-
If you have taken any loan mainly an unsecured loan then pay that loan totally and take NOC from the bank. If you do not pay any loan totally or any credit card then it shows settled. If there is any settled loan/credit card on your credit report then your score will go down day by day. It is also very difficult to get any new loan or credit card if there is a settled loan.
10)-DON’T TAKE MORE CREDIT CARDS-
Don’t take many credit cards. Having many credit cards affects your cibil score, whether you use those cards or not that doesn’t affect you. So keep the number of credit cards in limit. Take any new credit card only if you feel it is necessary.
11)- ALSO KEEP AN EYE ON LOANS IN WHICH YOU ARE GUARANTOR/CO-APPLICANT-
For loans in which you are co-applicant or guarantor, You shall be equally responsible for missing EMI. Your cibil score will also be affected by any EMI missed in that loan in which you are a co-applicant, it will be affected the same way as you missed your EMI.
12)- INCREASE YOUR CARD LIMIT (IF POSSIBLE)-
If the bank is ready to give rise to your limit credit card then don’t say no to it. Increase your credit card limit. Increasing the limit doesn’t mean increasing the expenses. Take the more limit and use less per cent of the highest limit. It will increase your cibil score very rapidly.
13)- DON’T APPLY FOR UNNECESSARY LOANS/CARDS-
Don’t apply for loans/cards if you do not need any loans. One more thing, don’t apply for a loan at many places when you need it only from one place. It might be you are not clear which bank will give you the best offers. Connect with us, we apply only in that bank which is best for you. We have more than 30 banks in collaboration.
After applying all these steps, it may take up to 6 months to get a good result in your cibil score.
14)- TAKE EASY LOANS AND PAY ASAP-
Sometimes you get offers on your credit cards for shopping on a 0% interest rate. Take that type of loan for the smallest tenure and pay the loan on time. This increases your reputation in your credit report.
15)- TAKE SECURED CREDIT CARD-
Put some amount as FD and from the bank to give credit card on behalf of that. Use that credit card, this will increase your cibil score. You shall also get your interest on your FD amount and also can use your credit card.
16)- USE PAY LATER-
Nowadays, many e-commerce websites are providing this service. Also, some banks provide this service. The benefit of this is that you do need not to pay any interest, just pay the amount on time.
Do shopping from credit cards while you have money in your account and pay before 45 days. By this, you make get cashback or any other offers.
REASON FOR LOW CIBIL SCORE-
To improve your cibil score you first know the reasons, why your Cibil score is low. There are a few major reasons for low cibil scores. You must consider these reasons to improve your cibil score.
- There is delayed payment in your loans
- Utilizing credit cards more than 30%
- Settled any loan or credit card
- Not paying your credit card bills on time.
- Inquiring for a loan many times
- Some error from the bank or in your credit report.
WHEN NEED TO INCREASE YOUR CIBIL SCORE?
When you need to apply for any loan or credit card then your cibil score is considered by the lender so then your cibil score must be high. Before applying for any loan or credit card you need to increase your cibil score.
HOW MUCH TIME DO IT TAKE TO INCREASE CIBIL SCORE FROM 500 TO 750?
It may take from 4 to 12 months. So before applying for any loan or credit card, check your cibil score. If your cibil score is low then start to follow the given steps so you can increase your cibil score.
WHY CIBIL SCORE IS IMPORTANT?
CIBIL score tells your past loan and credit card history. On this basis lender decides, if is it safe to give finance to this customer or not. To get any loan approval or for a credit card, your cibil score must be high.
The article ‘How to increase cibil score from 500 to 750?’ was to give you some special tips to increase your cibil score. You can easily implement these tips and get a good cibil score. One more point considered here is that your cibil score is only considered for any financial activity like taking loans or credit cards.
It takes approx 4 to 6 months to increase cibil score from 500 to 750 if you apply all the given tips.
If you got these tips useful to increase cibil score. Let us know, and comment your point. If you think any improvement is required in the article ‘How to increase cibil score from 500 to 750?’ We welcome you!