Credit score shows how is your record in financial matters. If your CIBIL score is wrong, then there can be a problem in getting the loan. Know here how much credit score is considered good and if it is bad then what are the ways to improve it.
If you apply to the bank to take a loan, then your CIBIL score is first seen. CIBIL score is also known as credit score. Credit score shows how is your record in financial matters. If your score is good then you can get the loan easily and with better interest rate. But if the CIBIL score itself is wrong, then there can be a problem in getting the loan. Know here how much credit score is considered good and if it is bad then what are the ways to improve it.
How much cibil score is considered good
Credit score is determined between 300 to 900. If your credit score is 750 or above then it is considered good. A score between 550 to 750 is considered good and a score between 300 to 550 is considered poor. Your credit score depends on many things. 30% of CIBIL score depends on whether you are repaying the loan on time or not, 25% on secured or unsecured loan, 25% on credit exposure and 20% on loan utilization.
Improve your credit score in this way
Pay loan installments on time
If you have taken a loan from the bank, then pay the bill on time. On the other hand, if you use a credit card, then pay the expenses incurred from the credit card on time. This will automatically start improving your credit score.
Do not increase the credit card limit again and again
Exceeding the credit card limit is not an achievement, rather it only increases your expenses. So don’t try to increase your credit card limit again and again. Increasing the card limit is a proof that your expenses are wild. In such a situation, the amount you spend from the credit card, you will have to pay that bill only. Many times if you are not able to pay the bill on time, then your credit score can be bad.
Do not take multiple loans at once
If you want to maintain a better credit score, then you should avoid taking multiple loans at the same time because in such a situation the EMI burden on you increases considerably. Sometimes EMI can also be missed. This can damage your credit score.
Think carefully before becoming a loan guarantor
Think carefully before becoming someone’s loan guarantor because if the borrower does not repay the loan on time or does not pay the installments on time, then you will also have to bear the brunt of it and your credit score may deteriorate due to this. Therefore, even if someone has become a guarantor, then keep an eye on whether the borrower is paying the installments on time or not.
Use up to 30% of the credit card limit
Use only up to 30% of the credit card limit. Avoid making large purchases with a credit card. This spoils your credit score. If in any case you have to make a big purchase with the credit card, then it should be paid before the end of the billing cycle.
