The CIBIL score is the credit score assigned to credit users by TransUnion CIBIL, which is one of the most popular credit information agencies in India. TransUnion CIBIL was established in 2000 and today, it holds records on more than 600 million individuals and 32 million businesses. The CIBIL score assigned by this credit information agency reflects an individual’s ability to repay debt on time and without defaulting. 

A high CIBIL score indicates a solid ability to pay loan EMIs on time and repay the loan without defaulting. A low CIBIL score, on the contrary, raises questions about a loan applicant’s creditworthiness. The good CIBIL score for home loan is 750 to 900. People with CIBIL scores in this range are people who can be trusted with timely repayment of loan EMIs, are not excessively dependent on credit, have a healthy mix of both secured and unsecured loans and in general, have a clean repayment history. If your CIBIL score lies within this range, getting approved for a home loan will be easy. You will also have high negotiating power concerning the loan terms and conditions and will be able to secure the loan at interest rates that you find desirable. If your 

CIBIL score range between 700 and 749, you do not have the ideal CIBIL score for a home loan. However, you may still be able to get a loan. However, you may not be able to get it approved at loan terms and conditions that you find desirable. However, if your credit rating is below 699, you must first improve your credit score and then apply for a loan. Next, we discuss simple tips to improve credit scores.

How to Improve Credit Score: Simple Tips That Will Help

To improve your credit score, here are some very simple things you can do

Your repayment history accounts for 35% of your credit rating. Lenders prefer to lend money to individuals who have had a clean repayment history with absolutely no cases of missed EMIs and credit card bill due dates. People with a clean repayment history are trustworthy and are very unlikely to default on loan repayment. If your CIBIL score has come down due to missed EMIs, one of the easiest ways to improve credit score is to start building a clean repayment history. In other words, start making it a point to never miss EMI and credit card bill due dates. This will help you improve your credit score in no time. If you are a salaried individual, always set aside the money to be devoted to EMIs before you start making any expenses. Further, set up autopayments. This will save you if you are someone who misses EMIs because you are terrible at remembering dates. 

Your credit utilisation ratio is important too. The credit utilisation ratio is the ratio of credit used to the credit available to you. People who are excessively dependent on credit have a high credit utilisation ratio. To improve your credit score, reduce your credit utilisation ratio by paying off some of the debt on your credit cards. You can also keep your credit utilisation ratio by using your credit card smartly and never making payments from it if you do not plan on clearing the entire amount due before the next payment cycle. 

Individuals who come across as excessively dependent on credit also have a low CIBIL score. Lenders study the number of hard enquiries under one’s name to analyze an individual’s creditworthiness and dependency on credit. People with too many hard enquiries under their name are considered to be more dependent on credit than they should be. Therefore, never apply for too many loans at the same time. Further, never apply for a loan or a credit card immediately after you have been rejected.

Maintaining a healthy balance between secured and unsecured loans will also work greatly in your favour. Having a healthy credit mix shows people’s ability to handle all kinds of debt and therefore, leads to a high CIBIL score. Further, maintaining a long credit history by maintaining all your old loan accounts and credit cards will also help you improve your CIBIL score over time.