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In this credit-driven economy, keeping your credit score high is always a challenge. One default, late payment of EMI, or multiple inquiries within a short period negatively impacts the credit score and affects your creditworthiness. However, despite all the efforts in keeping your credit score high, sometimes it takes a beating due to situations that you cannot control. 

Therefore, in such a situation, by making informed decisions and tweaking your spending habits a bit, you can make a lot of difference and improve your credit score rapidly. 

Steps to Increase CIBIL Score from 500 to 750

  1. Lowering Credit Utilization Ratio

    As a thumb rule, it is favourable if a good credit utilization ratio is maintained. For this one needs to use less than 30% of the total available limit
  2. Avoiding Closure of Older Accounts

    Older accounts show your long-term association and connection with the lending institutions, which is considered good by the credit bureaus. This further helps to improve CIBIL score. 
  3. Improving Payment History

    An improved payment history plays the most vital role in Increasing CIBIL score.
  4. Monitoring of Credit Reports

    Individuals need to regularly (not constantly) check their credit reports, as it helps one understand their creditworthiness and take steps to improve CIBIL score if needed.
  5. Multiple Credit

    We should avoid applying for multiple loans, cards and other debt instruments at once as it tends to depict a picture of one who is heavily dependent on credit. This behaviour is immediately tracked by credit bureaus which further leads to a fall in the credit score.
  6. Avoid Inquiries about Credit Cards

    An individual’s credit score may get affected if he enquires about other credit cards. Therefore, one should avoid this and instead investigate through online platforms without contacting the Credit card companies thus helping him increase CIBIL score.
  7. Pay EMIs on Time

    It is always a very good idea to ensure that one never misses a single EMI or credit card payment. This should be done on or before the due date. Missing a single payment or any delay in the same could lead to penalty charges as well as a reduction in the overall credit score.
  8. Always Pay the Complete EMI Amount

    Many people rack up a lot of debt by only paying the minimum amount due. However, you must know that in doing so, the rest of the amount payable will continue to accrue interest, which will further reduce your credit score. On the other hand, making regular ontime payments could help you improve your credit score over a period of 1-2 years (depending on the tenure of the loan).
  9. Pay Off Your Card Balance via Personal Loan

    A personal loan has a lower interest rate (11.99%* onwards) compared to that of credit cards. It is advisable to use a personal loan to pay off your credit card balance and then pay the personal loan through regular, more manageable monthly EMIs. 

So, as enumerated above, if the steps mentioned are followed diligently, there is no reason as to why an individual can’t increase his CIBIL score from 500 to 750.

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* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

FAQs

How To Maintain A Good CIBIL Score?

Here are some ways to maintain a good CIBIL score:

  1. Pay all your loan EMIs, credit card dues, and utility bills on time.
  2. Monitor your credit utilisation ratio and try to keep it below 30% of the available loan limit.
  3. Keep open the older credit accounts that have a good repayment history.
  4. Regularly check your CIBIL report for any errors and immediately raise a dispute with CIBIL if you find any.
  5. Do not apply for too much credit within a short period.

How Can One Improve Their CIBIL Score Immediately From 600 To 750?

You can increase your CIBIL score by:

  • Maintaining a favorable credit utilisation ratio, below 30% of the total limit.
  • Improving your payment history by paying EMIs on time and paying the complete EMI amount.
  • Avoiding closure of old accounts with good payment history to showcase long-term connection with lending institutions.
  • Monitoring your credit reports for inaccuracies and raising a dispute with CIBIL to get them corrected.
  • Avoiding inquiries about other credit cards as this could affect your credit score. Get your information online without contacting any credit companies.
  • Opt for a personal loan to pay off your card balance as this has a lower interest rate compared to that of credit cards. At SMFG India Credit, interest rates start at 11.99% per annum*.

Why is your credit score important?

A high credit score indicates responsible credit behaviour and a good payment history, increasing lenders’ confidence in your repayment ability. It can lead to faster approval times and lower interest rates if you fulfill all eligibility criteria. Generally, a credit score between 750 and 900 can get you favourable loan terms.

What is considered a good credit score?

What accounts for a “good” credit score can vary from lender to lender as well as the scoring model used. Generally, a credit score of 700 to 749 is considered to be ‘good’, while a score between 750 and 900 is said to be ‘excellent’.

How much does CIBIL score increase per month?

While there is no fixed monthly increase amount, there might be slight increases or drops in your score within a month depending on your credit behaviour. Significant improvements usually take around 4 to 12 months.

Is 600 a good CIBIL score?

Depending on the lender and the credit scoring model, 600 may be considered an ‘average’. You may find it difficult to get a loan or you may get a loan with higher interest rates and stricter loan terms. It is advisable to try to improve the credit score to 750 before applying for a loan or consider a co-applicant with a strong credit score.

Can you recover from a 500 credit score?

It is possible to recover from a 500 credit score. It will take time and consistent efforts in practicing responsible credit habits. Paying all dues on time, limiting the use of credit to below 30% of the available limit, and avoiding multiple loan applications at the same time are some ways to improve your credit score.

Can I improve my score in 30 days?

While you may not see a significant credit score increase in 30 days, consistent efforts will help you gradually improve and maintain a strong score in the long run. Some ways to improve a credit score in 30 days include – timely repayments, keeping a low credit utilisation ratio of 30%, and tracking credit reports for errors and getting them rectified from the relevant bureau.

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