753 CIBIL Score - Is it good or bad?
A 753 CIBIL Score is excellent for Indian borrowers. It signifies strong credit management and makes you a favourable candidate for loans and credit cards. Lenders view scores above 750 as ideal for offering the best financial products. With a 753 score, you are eligible for lower interest rates and premium offers, showcasing your reliability in managing credit responsibly.
How to improve your 753 CIBIL Score?
A credit score of 753 is already considered "Good" by most credit scoring models (like FICO), but if you're aiming to improve it further, here are a few steps you can take:
- Pay bills on time
- Why it helps: Your payment history makes up 35% of your credit score. A pattern of timely payments improves your score and maintains a positive credit history.
- Action: Set up automatic payments or reminders to ensure you never miss a due date.
- Reduce credit utilisation
- Why it helps: credit utilisation (the ratio of your credit card balances to credit limits) accounts for about 30% of your score. Lowering this ratio signals responsible credit management.
- Action: Aim to keep utilization below 30%. For example, if you have a credit limit of ₹1,00,000, try not to carry a balance of more than ₹30,000.
- Increase credit limits
- Why it helps: Higher credit limits can lower your credit utilization ratio, improving your score, as long as you don’t increase your spending.
- Action: Contact your credit card issuer to request a limit increase. If granted, it could help boost your score if you keep your spending in check.
- Maintain a mix of credit types
- Why it helps: A diverse credit mix (credit cards, loans, etc.) accounts for 10% of your credit score. This shows you can responsibly handle different types of credit.
- Action: If you only have credit cards, consider diversifying with a small personal loan or auto loan, but avoid taking on unnecessary debt.
- Avoid new credit inquiries
- Why it helps: Each hard inquiry (such as when you apply for a new credit card or loan) can slightly reduce your score for a short time.
- Action: Only apply for new credit when absolutely necessary. If you’re not actively looking to borrow, it’s best to avoid opening new accounts.
- Review your credit report for errors
- Why it helps: Errors or inaccuracies on your credit report can drag down your score.
- Action: Request a free copy of your credit report annually from all major bureaus and dispute any discrepancies you find.
- Keep old accounts open
- Why it helps: The length of your credit history makes up 15% of your score. Keeping older accounts open improves your average account age.
- Action: Even if you don’t use an old credit card, keep it open unless there’s an annual fee. It’ll help maintain a positive credit history.
- Consider a secured credit card or credit builder loan
- Why it helps: If your credit file is thin, these tools can help build a stronger credit profile over time.
- Action: If you have gaps in your credit history or limited credit, using a secured credit card or taking a small, manageable credit builder loan can help improve your score.
By focusing on these strategies, you can gradually improve your credit score even further. Remember, achieving an excellent credit score (800 or above) takes time and consistent financial behaviour.
How does a 753 CIBIL Score impact interest rates?
A 753 CIBIL Score puts you in an excellent position to secure loans and credit cards at the lowest possible interest rates. Lenders consider this score ideal, making you a low-risk borrower. With a score above 750, you will likely receive the best available interest rates and terms on loans, mortgages, and credit cards, saving you money in the long term.
