CIBIL score is a very important factor in determining your loan eligibility. Lenders take into account your CIBIL score before approving your loan application. CIBIL stands for Credit Information Bureau India Limited, it is one of the oldest credit scoring agency in India. All banks and NBFCs report their borrower’s loan data periodically to the credit scoring agencies. These agencies based on data gathered generate CIBIL score.

CIBIL score is a three-digit number ranging between 300-900, which depicts your past loan history. You past loan history includes the number of secured and unsecured loans taken and corresponding payment patterns i.e. whether the payments were made on time or not. If past loan repayment track is good, your score will be good, lenders will be willing to advance you a loan. On the other hand, a bad CIBIL score indicates lower creditworthiness, lenders will be averse in advancing you loan due to higher risk involved.

It is better to check your CIBIL score before applying for a loan. In case it is low you should work on it and improve it, to increase chances of approval of your loan application. Given below are the ways to boost your CIBIL score:

Check Your Credit Report Regularly

If you are using any credit card or you have any loan running, then it is better that you check your credit report regularly. Checking your CIBIL score only is not enough, do a thorough analysis. If you come across any errors in your credit report, then report these to credit bureaus for rectification. Some small errors like wrong personal information etc., may not have such a big damaging effect on your CIBIL score but some of the big errors can have a negative effect. Hence, it is important to check your credit score regularly.

Timely Loan Repayment

If your score is low, it is very important that you pay all your credit card bills and loan EMIs on time. Paying all bills and loan EMIs on time has a positive effect on your CIBIL score and also whenever you apply for any fresh loan, it gives the lender a good impression. In order to ensure timely loan repayment, you can set reminders in your phone or laptops regarding the payment date etc.

Ask for Forgiveness

Even a single late payment is big enough to lower your credit score. But if it is just a one-time case due to any specific reason, you can request your lender to remove that black spot from your credit report. But you keep on repeating this it surely will be reflected in your loan repayment history.

Credit Utilization

If you are using a credit card, then your CIBIL score to a great extent depends upon the proportion of the available credit limit to the limit you are currently using. Credit utilization accounts for about 30 percent of your credit score. Hence, keeping the credit utilization low will help in boosting your credit score.

You can calculate your credit score before applying for a loan using various online tools. In case your score is following the above-mentioned points will surely help in improving your credit score if it is low.