Tips for Improving Your CIBIL Score to Qualify for a Credit Card

A low CIBIL score for a credit card reduces your chances of getting approval for a credit card and other forms of credit. Most issuers approve your application if you have a 750+ credit score, increasing your odds of getting a better offer. This is why having a good score is crucial if you plan to get a credit card. 

However, improving your score is no walk in the park and requires financial planning, discipline, and patience. That said, here are some smart and easy tips to boost your creditworthiness and eligibility. 

Clear Any Unpaid Dues

One of the easiest ways to boost your score is to pay any pending credit card bills. Since having an outstanding balance is a sign of bad credit management, it is also noted when calculating credit scores. Therefore, you need to pay your total credit card bill before you can take any other action to improve your score.  

Make Timely EMI Payments 

Once you have paid all your past due, you should consider maintaining a record of positive repayment behaviour. This means paying your upcoming EMI on the due date. You can also make an advance payment to avoid the risk of missing the due date. 

Another way to reduce the risk of accidentally missing payments and damaging your credit score is to opt for an auto-debit facility. With this option, the issuer or lender automatically deducts the payable amount from your account on the due date. 

You can also ask them to alert you a few days before the due date to make advance payments manually or to maintain the account balance for the payment.

Lower Credit Utilisation Ratio

Your credit utilisation ratio refers to the percentage of total credit you have used. Maintaining a ratio under 30% is ideal for a good credit score. To achieve this, 

• Limit your credit card use 

• Close any loan you can 

• Pay your credit card bills

Avoid Frequent Credit Card Application 

Whenever you apply for a new credit card, issuers request credit bureaus for a copy of your credit report to assess your borrowing capacity. Multiple such queries indicate desperation to get a credit card and a lack of funds. Since this is not a positive reflection of your financial health, avoiding multiple applications in a short period is a better choice.

Maintain Credit History and Mix

Another crucial factor affecting your score is your credit history. The longer the history, the better. This is because a more extended credit history gives bureaus more data to analyse your credit behaviour for a longer time. For the same reason, it is crucial to keep the accounts where you have made timely payments open. 

Financial institutions also check the types of credit options you have previously availed. This is why many financial experts suggest borrowing a mixed bag of credit. This includes unsecured credits like personal loans, secured loans like home or bike loans, and loans with variable tenure. 

Check Your Credit Report to Resolve Discrepancies 

Sometimes, your credit score may take time to update, as not all lenders and issuers inform the credit bureau immediately. Generally, it can take between 30 to 45 days for the financial institution to report the data. 

If your credit score does not update after the decided interval or has incorrect details, you can report the discrepancy to get it fixed. You will see your updated credit score once the institutions resolve it. 

This is why it is essential to check your credit report periodically and fix any errors at the earliest. All bureaus give you one free report every year, and to check more often, you can choose a subscription plan.

Get Joint or Secured Credit

Financial institutions offer these alternate credit options for those with a low credit score. In joint credit, you apply with someone who has a good credit profile. If you default, the repayment responsibility falls on the joint borrower, which is why they are offered to high-risk borrowers. 

In secured credit, you provide collateral which offsets the risks of low credit score. By repaying these credits on time, you can build a good history and score. 

These tips will help you overcome a low CIBIL score for a credit card, but it may take some time. Once you have a good credit score, you can easily apply for any credit card. One of the best options you can choose is the One Credit Card. This is a new-age card designed to give you maximum benefits and stress-free experience. 

It gives you up to 5X reward points on your top two spending categories and many other lucrative offers and deals. This way, you can save more with every swipe and stay within your budget. With its powerful One Credit Card app, you can keep track of your credit, lowering the risk of overborrowing. Apply online on the official website or download the One Credit Card app now to get started.