How to Improve CIBIL Score for a Personal Loan Approval

NOIDA, India - March 13, 2025 - PRLog -- Your CIBIL score plays a crucial role in getting a personal loan approved in India. Lenders check your credit score to determine your repayment ability and financial discipline. A CIBIL score of 750 or above is considered good and increases your chances of getting a loan at a lower interest rate. If your score is low, don't worry—you can improve it with the right financial habits.

1. Pay Your EMIs and Credit Card Bills on Time

One of the biggest factors affecting your CIBIL score is your repayment history. Missing even a single EMI or credit card bill can bring your score down. Set up automatic payments or reminders to ensure timely payments.

2. Keep Your Credit Utilization Ratio Low

Your credit utilization ratio is the amount of credit you use compared to your total credit limit. Ideally, you should keep it below 30%. If you often max out your credit cards, it signals financial stress to lenders, which negatively impacts your CIBIL score.

3. Avoid Multiple Loan Applications in a Short Time

Every time you apply for a loan or credit card, lenders check your credit report, leading to a hard inquiry. Too many inquiries in a short period can lower your score. Instead, compare lenders online before applying to minimize inquiries.

4. Maintain a Healthy Credit Mix

Having a mix of secured (home loan, car loan) and unsecured (personal loan, credit card) credit can positively impact your credit score. Relying only on unsecured credit can make you look risky to lenders.

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5. Check Your Credit Report for Errors

Sometimes, incorrect information in your credit report can bring down your score. Regularly check your CIBIL report for errors like:

Incorrect loan details
Payments not updated
Fraudulent credit inquiries
If you find any mistakes, raise a dispute with CIBIL to get them corrected.

6. Don't Close Old Credit Accounts

The length of your credit history affects your score. If you have an old credit card with a good repayment record, keep it active. Closing old accounts can shorten your credit history and lower your score.

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Final Thoughts

Improving your CIBIL score requires consistent financial discipline. Pay your dues on time, use credit wisely, and avoid unnecessary debt. A high credit score not only helps in personal loan approval but also ensures you get the best interest rates and higher loan amounts. Start working on your credit health today for a stress-free loan experience!