Summary: If one takes a closer look, it is evident that even a few years back people were unaware of what CIBIL score really meant. However, it is really important to make sure that your CIBIL score is on the higher side. There are several ways to make sure it is. Read on to know more.
Before diving straight into the topic, it is best to know what is a CIBIL score? A CIBIL score is the three-digit credit history of an individual. It is very important that the CIBIL score of a borrower is within the 300 to 900 range. That being said, if a person has a consistent credit score of 750 and above, it is considered as healthy in the eyes of borrowers.
The following are three basic steps to make sure that credit score stays within the range recommended :
Have a basic understanding of the facts that affect your CIBIL score
One can only take the necessary steps to ensure that their credit score is within the recommended levels when they are aware of the facts about how CIBIL score is calculated. Make sure that your repayment history and current credit portfolio, etc. are spotless. Any defaults in repayment can drastically bring down your CIBIL score.
It is best if you refrain from taking loans of large denominations
It is best that a borrower refrains from taking a large loan, especially if it is their first loan. When a person starts off with a small loan amount, they can easily wrap their heads around how the whole system works. On top of that, they can discipline themselves by keeping the repayment amount aside every month even if they are sacrificing on their personal life.
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Take the necessary steps to effectively manage your debt
Efficient management of debt amount is necessary in order to ensure that the current score improves not the other way around. It is best practice for any borrower to refrain from taking more than one loan at the same time. One should always make sure that they are repaying the loan amount in EMIs on time every time. If you are already under debt from one financial institution, it is best that you don’t apply for another loan from another bank.