How to improve CIBIL Score

How to improve CIBIL Score

Your CIBIL Score or credit score is a measure of your credit health. Having a good score is important to get a loan or credit card from any lender.
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What is CIBIL Score?

Your CIBIL Score or credit score is a three-digit number that measures your credit health. This score ranges from 300 to 900. The higher your score the better are your chances of getting a loan or credit card. Lenders check your credit score before they approve your loan application. A poor score could result in your loan application being rejected.


✅  Check your eligibility for personal loan with phone number and OTP → Apply online in 5 minutes → Receive funds within a day*.

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What is a good CIBIL Score?

A score of 700 and above is a good CIBIL score. Credit scores of 750+ are ideal scores to get a loan approved. Individuals with high credit scores are eligible of all kinds of loans and credit cards. In addition, you also get better borrowing terms like better interest rates. The below table gives you an understanding of what the different CIBIL Scores mean.


 

ScoreMeaning
300 - 650Your credit score is poor
650 – 699Your credit score is fair
700 – 749Your credit score is good
750 – 849Your credit score is great
850 – 900Your credit score is excellent


Your credit score is not permanent. It changes over time with healthy credit practices. For example, Anita was looking to apply for a personal loan. But her application was rejected due to her poor credit score as she had missed a few EMIs. However, she decided to take action to improve her credit score. She followed the below mentioned actions to improve her score:
 

  • Made timely credit card and loan repayments
  • Increased her credit limit
  • Kept her credit utilisation to a minimum
  • Closed all her unused loan accounts

  • Rectified errors in her Credit Health Report


By doing this she was able to build her credit score gradually over time.

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How to improve your CIBIL Score

Let’s do a deep dive on the factors that can improve your CIBIL Score

    1. Repayment history: Your repayment history is a crucial factor impacting your score. You must ensure that you follow a healthy practice of repaying your loans regularly and on time. Delayed or missed payments can have a negative impact on your score.
    2. Credit utilisation: Avoid maxing out on your credit card limit. This behaviour indicates that you are a risky borrower and can negatively impact your score.
    3. Healthy credit mix: Having a healthy mixture of credit is a good reflection on your Credit Health Report and has a positive impact on your credit score. Use a mix of credit like credit cards, as well as secured (home Loan, gold loan) and unsecured loans (personal loan) and repay them on time to maintain a good CIBIL Score.
    4. Avoiding multiple credit enquiries: Making multiple credit enquiries or applications for loans to different lenders in a short period indicates irresponsible credit behaviour. Every time you a make an enquiry for a loan, the lender gets your credit information from a credit rating bureau. Over time, having too many enquiries can negatively impact your credit score.

    5. Length of credit history: Your credit history gets built from the time you first apply for a loan or credit card. It is nothing but the duration since when you have been borrowing. Having a lengthy credit history helps with an understanding of your credit behaviour like timely payments, missed or late EMIs. This in turn can impact your approval for new loans or credit cards.


    Credit scores are very important and indicates how creditworthy you are as a borrower. You can check if you have a pre-approved loan offer with just your phone number and OTP – no need to visit the branch.

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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term (Dropline) Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 36 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of interest per annum

10% to 30% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi Loans –Up To Rs 1,999 To Up To Rs 18,999/- (Inclusive Of Applicable Taxes)

Will be deducted upfront from loan amount.

Bounce charges

Rs. 700 to Rs. 1,200/- per bounce

“Bounce Charges” shall mean charges levied on each instance in the event of: (i) dishonour of any payment instrument irrespective of whether the customer subsequently makes the payment through an alternate mode or channel on the same day; and/or (ii) non-payment of instalment(s) on their respective due dates where any payment instrument is not registered/furnished; and/or (iii) rejection or failure of mandate registration by the customer’s bank.

Part-prepayment charges

Full Pre-payment:

• Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
• Flexi Term (Dropline) Loan: Up to 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.
• Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) of the Dropline limit as per the repayment schedule as on the date of full prepayment.

Part-prepayment

• Up to 4.72% (Inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-
• Not Applicable for Flexi Term (Dropline) Loan and Flexi Hybrid Term Loan.

Penal charge

Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term (Dropline) Loan:

Up to 0.295% (Inclusive of applicable taxes) of the Dropline limit (as per the repayment schedule) on the date of levy of such charges.


Flexi Hybrid Term Loan:

Up to 0.472% (Inclusive Of Applicable Taxes) Of The Dropline Limit During Initial Tenure. Up to 0.472% (Inclusive Of Applicable Taxes) Of Dropline Limit During Subsequent Tenure

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