A good CIBIL score is essential for securing loans and credit cards with favorable terms. It reflects your creditworthiness and financial discipline. Here’s a comprehensive guide to help you maintain and improve your CIBIL score effectively.
DO’s
- Spend what can be paid back easily.
- Pay all your credit card and loan bills on time (better if paid 1 week in advance).
- Set payment reminders and activate autopay.
- Try to keep overall credit utilization within 30% of your total credit limit.
- If your credit utilization is high consistently, try increasing your total credit limit.
- Try to maintain the same due date across cards (easy to remember).
- Check your credit card statements for correctness.
- Pay attention to SMS and emails from credit card issuers and apps for due reminders.
- Avail at least one credit product to build your CIBIL score.
- A mix of secured (e.g., home loan) and unsecured credit (credit card/personal loan) is good.
- Report any unauthorized transactions on your credit card immediately.
- Close your cards properly.
- Check your CIBIL report for errors periodically.
- In case of an error, take suitable action.
- The RBI gives a 3-day grace period on credit card bill due dates. If availing this, try paying via the same bank app or net banking.
DONT’s
- Never default on any bill payment.
- Never overstretch your finances for offers/rewards.
- Never pay bills late.
- Avoid going over your credit limit.
- Don’t sign a credit contract easily.
- Don’t apply for too many cards or loans in a short time.
- Avoid signing up for pay later options as much as possible.
- Avoid closing old cards, as it shortens your overall credit history.
Note: If your CIBIL score has decreased due to a bad day or decision, don’t worry too much. Maintain discipline, and it will recover quickly.
Tip: If unable to pay the bills in full, at least pay the minimum amount due on time. This is not a recommendation, though.