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How Much Time is Needed to Improve One’s CIBIL Score?


Improving the CIBIL score can be a time-consuming process; it requires careful planning and financial discipline to achieve that. In this regard, timely payment of dues, maintaining a low credit utilisation ratio are some prominent methods that can aid in this process.

Usually, to become loan eligible, individuals need to maintain a CIBIL score of 750 or above. If someone, say, has a score of 650, he or she will need at least 4-12 months of following a few parameters to become loan eligible. Therefore, it is crucial to check CIBIL score and undertake the necessary measures to improve it before initiating a loan application process.

6 Factors to improve credit score swiftly

As mentioned before, lenders consider a CIBIL score above 750 as a healthy one, and in case someone is lagging, they can work on it to get it back up there. Here are some factors that one can follow to reach that threshold –

Paying the dues on time can help individuals to better their credit score. However, doing that for one to two months will not resolve anything. One needs to make this a habit to keep it up for a longer period, at least a year, to see the difference in their credit score and its impact on their credit report. In the meantime, they can check CIBIL score regularly to track the difference.

The credit utilisation ratio holds a significant weightage in deciding one’s CIBIL score, as it represents an individual’s borrowing tendency. Therefore, maintaining this ratio, preferably below 50%, is ideal to present a borrower as responsible and not credit hungry.

Keeping the percentage consistently below this 50% mark will improve one’s credit rating.

Along with the previous factor, one should focus on the FOIR as well. It stands for an individual’s fixed obligation against his/her monthly income. Since this factor determines the repayment capacity, borrowers can try to keep it low to better their eligibility for a loan.

In this regard, they can take the assistance of debt management techniques and keep this ratio low consistently. This will reflect on the credit score after a period. Borrowers can check CIBIL score periodically to know its impacts.

In case an individual has a 5-year-old credit card, it has an extensive credit history against it. Therefore, closing an account like this will lower that person’s credit score, as he/she will lose a considerable credit history.

Instead, one can keep such accounts active and make regular payments to build a strong credit profile. Doing so consistently will increase his/her CIBIL score after a period.

Another way to improve CIBIL score is by eliminating the mistakes in a credit report. To do so, individuals need to keep track of this statement and monitor it regularly. Once they find any issues, they can get back to their respective credit rating agencies and report this issue.

It may take some time depending on the CIBIL dispute status, but it will be resolved if there are any mistakes. Therefore, even if it takes 2-3 weeks, the credit score will reflect a positive change afterwards.

In case a borrower has faced rejection in his/her personal loan application, it is ideal to evaluate the reasons instead of making another application. The reason being, every application initiates a hard enquiry with credit rating agencies that adversely affects one’s credit score.

Instead, borrowers can follow the above-mentioned pointers and work up their credit score and then make an application to avoid such a scenario next time.

On the other hand, a borrower who has no credit score because he/she has a credit history of less than 6 months can also build it with careful planning. They can always check their CIBIL score from the official website of various lenders.

These are some ways that can help individuals to build their credit score if they follow it patiently. In the meantime, they can check CIBIL score to learn how it is performing and refer to a credit information report to gain a better insight.

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