Actions to take to raise your credit score.
- Get rid of all of your debts.
- Keep up with your EMI payments.
- Limit how much credit you use.
- Use a combination of credit.
- Identify any discrepancies in your credit report.
If you want a home loan or car loan, if you apply for a credit card the first thing which will be checked is your CIBIL score. It is good when the CIBIL score is more and bad when it is less. The full form of CIBIL is Credit Information Bureau India Limited. Cibil score is between 300 to 900. I have said the Cibil score is good so generally, a 740 + cibil score is good and if you have an 800 + CIBIL score then you have a high chance of loan approval. But if you have less than 800 or 740 CIBIL scores then what to do?
If you have a low cibil score then you are going to get useful information in this video. I will tell you seven steps by which you can improve your cibil score and if you follow these steps you will see your cibil score 800+ always. Now, what are these steps? Most people make the mistake of making a credit card but this credit card affects your cibil score very much.
People think that if they are paying bills timely then their cibil score will be higher but they don't know if they don't see their credit utilization percentage you have a credit card limit of one lakh rupees there are many people out there who have credit card limit of 1 lakh rupees and they are spending 80 to 90 thousand monthly and if you ask them they will tell you that 5 to 10,000 limit is left. It means if a person uses a 95% limit, now you will say we are using the limit that is given, it's very wrong.
Whatever limit you are using, everything has been reported to the credit bureau. And this reporting signifies that you are depending more on credit and you are living your life on credit now this will affect your cibil score. because whenever you go to take a loan they will check your CIBIL score and they will find that you are already dependent on credit and they cannot give you further loans. You have to keep your credit utilization limit below 30% every time. If it is above 30% then you will realize that your CIBIL score has been affected.
Now, how do you manage this utilization if the limit is 100000 and it can happen salary is more but your credit limit is 100000. If your salary or income is more you can do one thing that you can request your bank to increase your credit card limit. Generally, banks increase credit card limits by offering as you are frequently using credit cards. If you accept that offer your credit card limit has been increased. What will happen next if you have a 1 lakh limit and now it is 2 lakh example if you were using 50000 it was your at 50% credit utilization it meant you are using 50% off
your credit but if the limit is 2 lakh and you are using 50000 then your credit limit is 25% which is less than 30% which means it is good for your CIBIL score. so remember if you can increase your credit limit then you should do it and from which credit card you are incurring expenses, your credit utilization percentage should not increase by 30% You can do one more thing you can get a new card if your income is good then a new card can also be issued, if you are spending from one card again and again and its utilization
If the percentage is high then you can get a new card, in which you do not have to pay joining fees and annual charges. In the name of credit, card banks charge high annual charges which according to me is not good until you are getting attractive benefits from them. You should take care that no Annual charges and no joining fees cards are also available
We will try to figure it out for you. Next, you had taken a credit card 5 years ago. If you have taken a credit card 5 years ago and let's assume you are making payments timely and everything is going fine. What happens if we get a new card then we think of closing the older one as it is of no use. If it doesn't have high annual charges and maintenance charges then you should not close it, but why? Because what credit card history is being made by a credit card depends upon how much older it is.
If you are using a credit card for 5 years or 4 years and comparatively you make a card today now if you close the older credit cards then your history will not appear. If you apply for a loan let's assume that you are purchasing a home and you want a home loan which is a general loan. It can happen that you do not get the loan because your credit history is not appearing. So here more your credit history is older it is good at this will improve your CIBIL score So your CIBIL score improves with a good credit history if you have made timely payments of any loan or any credit card so it is good for you. How many people have not taken loans and credit cards so they do not have any credit history? If they want to take a big loan or want to apply for a good credit card example, if you want to apply for American Express then you will not get it. I understand this. I will give you a solution for this at the end of this video if you are new and you have not applied for a credit card then also you can have a good credit history and it will improve your CIBIL score because if there is no credit history then there is no CIBIL
But CIBIL score can be made good and how it can we will talk about it later. Now pay attention here, many people in India have bad CIBIL scores and they may be watching this video. They think that they have credit cards which means they have money of 100000 in hand and they exhaust all 100000 limits. So I told you that you should not use more than 30% of your limit and they have exhausted it and they think that they will not give the money. They indeed think they had taken out the credit card, exhausted the limit and will not give money to the bank. There are many people out there like this. Because of this in India, there are many pin codes on which no credit card will be issued. If you live in an area that is blacklisted so you will not get a credit card on that pin code because many groups of people have done this in India but also there are people in India who paid timely repayment and are using credit cards wisely so credit card company also want to give credit cards because understand this thing credit cards are ultimately…
Okay, tell me before coming to this point I will ask you whether a credit card is good or bad? The credit card is neither bad nor good. It depends on how you use your credit card whether it is good or bad. You are getting a 50-day interest-free loan when you use your credit card for purchasing something let us assume that on receiving a statement on day 1 you know that statement will be received you will receive 20 days after this month to make payment so you have to make payment after 50 days, for example, you have a credit card limit of 4 lakh and you have utilized 1 lakh that is 25% then there will be no interest on that one lakh and you do this many times in a year, for example, you have used 10 lakh like this as credit and paid later so you use 10 lakh again and again one by one lakh but there will be no interest. So isn't this a loss for the bank? You will say absolutely yes. So why are bankers giving credit cards? Because they know that you will one day miss the due date of payment which is 50 days some will miss or forget or be unable to pay before the due date.
Those people who keep their credit utilization higher for example have 100000 limits and they use 90000 so they know that their income is 30 to 40000 that's why we have given a credit card of 100000 limits and he will be unable to pay. So from there the interest which cannot be paid will be charged at double or triple. So this is a very thoughtful process to make you fall into the debt trap, so what you should pay more attention to, I always tell you that the amount you spend through credit card will
always be present on your debit card. This means you could have paid from your debit card but you also know here that if you swipe from your credit card so for example if you are doing shopping and purchasing clothes and you have done shopping for rupees 10000 and you know if swiped you your credit card you will be debited with 10000 but the shopkeeper will not get all 10000 and he get amount after deducting 2 to 2.5% which is the actual income for the credit card companies and in return of this they provide you rewards points or cash back.
Now you have to understand that if you have made payment timely then a credit card is very good you are getting interest-free money and reward points. But if you have made late payments, people having less score have 70% Times the same scenario that the payments are being made late and if payments are being made late then the charges will be levied and will affect your CIBIL score. So never delay your payments. It means you have to make payments on a priority basis and another thing is that if you have fallen into a debt trap. You have swiped with your credit card and now you are unable to pay and you feel you don't have money I am telling you to pay the money by arranging it because if you have made delay for 6 months then you will not get any loan for further 6 years and also no credit card. The delay of 6 months will not allow you to take a loan for 6 years your CIBIL will be destroyed so never make this mistake and this is my advice to you otherwise it is your choice to do whatever you want to do.
After this point is very important there's no need for a loan but people apply for loans and if and if there is a need for a loan so apply at 10 places you know that your CIBIL score will be fetched as many times as you apply for a loan. Not many people know this either number of times you are applying for a loan online will affect your CIBIL score. If you will check again and again the CIBIL score will be fetched and affected the more times you check online. Everything is reported to the bureau that this guy has applied for a credit card so many times. You have applied for 20 credit cards that are not required. You will also get a lot of rejections there. There will also be many approvals. Ultimately or CIBIL score will be bad in that. Don't apply for too many credit cards. If you need one or two credit cards, put a limit on that you apply if you don't need a lot of loans then what are you doing? Now increase the income and don't depend too much on the loan! It is necessary to get out of the cycle of life. And don't fall into a debt trap.
Don't apply unnecessarily for too many loans here. look at this quote of what I have written."Take easy Laon & Easy ASAP"You are saying not to take a loan, then you are saying that you have to take a loan. what are you talking about? If you apply for too many loans, the CIBIL score will be bad. But we have to maintain credit history too. If you have money in your bank and you cannot spend it with a debit card, then you are getting many benefits from a credit card. Similarly, if you buy we buy many things like TV and other devices as we see a lot of offers that 0%EMI. Let's say that you could have given one lakh or 50 thousand only. You have taken Easy Monthly Installment, that too with Zero Percent interest. It is prudent. But for that keep one thing in mind there is no need to get 0% EMI for 12 months or 24 months. If it can be finished even in 3 months, then finish it by doing it in 3 months. i.e Pay ASAP. Pay this loan at the earliest. If you have to pay Rs. 10000 for the goods of ₹ 30000, then give it. This will increase your credit history.
You took a loan, then paid it off, then took a loan again and paid it off. Your credit score gets Are you getting it? But make timely payment. This is another important point that doesn't affect your CIBIL score again and again if you will check then There will be many calls. And checking the CIBIL score again and again also makes CIBIL score worse. This is important that is why I have repeated this. Now, there will be many people here that dont have any such CIBIL score record or credit history, and if you are new whether you are 19 or 20, but he never had any credit cards,credit history, and credit score. So how will it become? There are two easy steps. When you don't have any credit card history then no company is even giving you. What you can do here is contact your bank and if you have money in that bank account then you can apply for FD. Your bank will issue an FD Backed credit card on that FD. And will also give you some limits around that. If you have an FD of two lakhs now, then you will also get a credit card with one lakh. The FD will continue to run and interest will continue to accrue on it.
What will happen when you get a credit card? This will build your credit history. But you have to pay timely. Now the next second important thing is today there are many companies that issues buy now pay later card. Often these pay later cards when compared to a credit card comes out better. You never get charged. There will be a charge when you make a late payment. If you don't want to pay late then you can get a buy now pay later card easily.
Note:-
Never take out loans frequently, especially for credit card users. Limit credit utilization. According to data, limiting credit use to 30% will help to keep one's credit score higher, but on the other hand, having a high credit score utilization of more than 40% could be harmful for a user's CIBIL score.
