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Can you bounce back from a low CIBIL score?

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A low CIBIL score is not something to be dejected over. There are ways you can improve your score and gain credit.

The prevailing idea seems to be that one should not let their CIBIL score drop under any circumstance. It is a common misconception among consumers that individuals with a low CIBIL score may not get access to credit or loans, let alone a chance to rebuild their score.

There can be several reasons for a low CIBIL score. You may have hit a rough patch and couldn’t make timely payments, you allowed yourself to get carried away with your brand-new credit card, or you simply forgot to keep sufficient funds in your account and missed the due date. While your credit profile may be affected by these situations, your credit score is based on several other factors.

Your CIBIL score is a reflection of past credit behaviour and payments; it’s a history of your credit and good news is that even if you have fared poorly there are ways to rebuild your credit history and CIBIL score:

  • Pay off all outstanding amounts: Your first priority must be to clear all outstanding dues. If you have many credit cards and personal loan accounts, consolidate these loans and take a single loan to pay it all off. Consolidating your loans helps you stay relaxed with only one loan to manage and saves you from the confusion of multiple due dates. It is a first step towards ensuring creditworthiness.
  • EMIs shouldn’t exceed 30% of your monthly salary: Knowing that your EMI to income ratio should not be more than 30% of your net salary, can help you plan your purchases. Maintain this cap on your EMIs when you are trying to build your credit profile. The reason is that any amount over and above this reduces your financial capability to repay your loans.
  • Avoid additional credit unless necessary: Maximizing the use of your credit card in a financially lean period may not reflect well on your CIBIL score and you must act with caution. Keep a low balance and apply for more credit only if you cannot do without it. Instead of having more cards in your wallet, consider using the old credit cards you have. Make timely payments of your credit card bills to get a positive impact on your score.
  • Show that you are trustworthy with all credits: Unsecured loans i.e personal loans and credit cards. are only one of the many forms of credit that you can access. A mixed bag of credit helps build a stronger profile showing lenders that your loan repaying capabilities are trustworthy.
  • Keep an eye on your CIBIL Score and Report: It is a good idea to check your CIBIL Report for any inconsistency such as incorrectly stated open accounts that may increase your credit exposure. Also, monitor your score and report regularly to know how well you are doing, your score analysis, credit history and trends.

A high CIBIL Score is highly desirable because when you are in need of credit it can help you get access to loans and credit. Therefore, you must put in the time and work towards achieving it as well as maintaining it. Bouncing back from a low CIBIL score is possible and you can start work towards your financial goals today.

Click here to check your latest CIBIL Score for free.


Disclaimer: Articles published on the website are merely indicative and suggestive in nature and do not amount to solicitation. The contents do not guarantee the desired returns and/or results. Reader is advised to exercise discretion and consult independent advisors for achieving desired result. Visitors to this blog/ website w.r.t products & services offered by RBL Bank Limited herein, shall ensure that the comments / feedback posted shall be restricted to the contents published herein and shall not contain such language that may be un-parliamentary or against any religion, caste, section of society, political view etc. While our endeavor is to publish the comments that are submitted, however, all comments/feedback shall be subject to internal review by RBL Bank Limited. We do not guarantee that the comments that are submitted will be published.

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