A credit score is your credibility quotientthat a creditor or banks will check before approving your loan application. A CIBIL scoreis a three digit representation factor evaluated using factors that can prove your debt repayment worthiness. The highest score you can max in a CIBIL report is 900. Higher the value, greater is our credit worthiness.

If you have a poor rating, here are 4 factors that will help you increase credit score.

Clear your outstanding against your accounts

Make payments on time and clear outstanding dues ASAP

Major percentage of your CIBIL score calculation depends on how responsible you are at making on-time payments. Missing a payment only a couple of times in a quarter can slide your credit rating significantly.

If you have a poor rating, start your CIBIL score calculations using the report available online. Collections against your name arise due to non payment of debts to the collection agency or to the bank. If there is a dispute with the lender, raise it online using CIBIL Consumer Login.

You will be able to see the names of lenders who are awaiting your debt repayment.

Use Card responsibly

Don’t max out your threshold for any card

Whether you have one card or many, crossing the limit will bring your credit score down. Increase your credit score by utilizing the cards responsibly. Use them only in case of emergency or cash deficit in your regular account. Never use your card facility to repay another debt. It will reflect in your CIBIL credit report negatively.

In case you are unable to see your credit credibility, use CIBIL consumer login to verify open card utilisation rate. Higher the card utilization rate, higher will be your chances to improve CIBIL credit score.

How to find Open credit card Utilisation rate?

Divide your existing total balance in cards by the number of total open credit card limits. The percentile factor is your Utilisation rate.

CIBIL disputes related to credit card may take more than three months to get reported. To reach maximum score, maintain a good credit card utilisation rate by paying off balances in other cards. This is a good way to negate the difference arising from the disputed card limit.

Perform a CIBIL score calculation every month instead of doing it quarterly,especially if you have more than one credit card from different agencies.

Reduce instances of Hard Credit enquiries

More enquiries cut down your credit credibility

Many financial advisors acknowledge the significance of the total number of hard credit enquiries. Use CIBIL consumer login to identify total number of hard credit enquiries made into your credit report. An enquiry is an event when a bank, loan provider or a credit card issuer checks into the credit history before approving an application.

Following cases will lead to chance occurrence of credit card enquiries.

Loans: Auto, Education, Business, Personal

Credit card

Mortgage

To increase credit score adequately, avoid applying multiple lines of credit at the same time. It shows poor credit credibility in the recent run.

History of credit

Account opening date and mode of last activity

Checking your credit report will reveal a lot more information about credit trends from your account. It shows how long you have been nursing an account and how it is used. Longer the credit history, easier it is to resolve the CIBIL dispute arising due to one off instance of loan repayment default.

To improve score, maintain your oldest accounts and nurse them respectfully rather than opening a new account. Also, avoid shutting down your credit card even if it is proving hard to maintain.

CIBIL score calculation is done by tentatively breaking down your payment history, your account activity, existing and new credits and your response towards debt repayment.

written by Arun Ramamurthy, author of “Unlock the Power of Your Credit Score” : India’s first book on credit scores