Now that we know why the credit score is important, let us take a look into what you can do to increase your CIBIL score. The need to increase cibilscore will arise only when your credit score is in trouble and you are planning to apply for a new loan or a credit card. If we are to assume that your score is not good then these are the things that you can do to help it improve.
1. Check Your Credit Report
Checking your Credit Reports regularly is a good idea because it will tell you two things that are absolutely critical to your credit score. The first will be the loan or credit card where the defaults or delayed payments exist that have brought down your score.
2. Note Your Credit Utilization Ratio
Make sure that you do not use your credit card for all transactions. Try and keep your credit utilization ratio at 30% or less. When you do this, you will see a positive impact on your CIBIL score.
3. Don’t keep applying for credit if rejected
If you have applied for a loan or a credit card and your application has been rejected, the information will be recorded in your credit report. If you go and apply to another bank immediately then they will see your low score and the previous rejection and may reject your application. The best thing to do in such cases is to not apply again and wait for the score to improve.
4. Pay your loans at regular times
If there are loans which you have been delaying the payments of then you should make it your priority to start becoming prompt with the payment. If you are struggling with the current EMI that you have to pay then you can approach your bank to help you restructure the debt to make it easier to pay.
5. Pay your credit cards regularly
When it comes to credit cards, the best thing to do is to not come too close to the limit of your credit cards. You should also make sure that you are not paying back only the minimum amount due on your cards, you need to pay back the entire amount or at least a sizable amount.
6. Consider things before settling loans and credit cards
Many times people opt to settle a credit card or loan. What this means is that they approach the bank and ask for a deal that will allow them to close the debt for an amount that is lower than the actual amount due. While banks do, at times, entertain such requests, the settlement does reflect on the credit report and will have a negative effect on the score or a bank’s willingness to offer fresh credit.
7. Get a mixed bag of credit
When it comes to loans there are two types of loans, secured and unsecured. If you take too many unsecured loans, banks tend to see it as a negative and might be inclined towards declining your loans. Watch out for joint applicants.
This is actually a situation where you could suffer even if you are not at fault. In this scenario, if you are the joint application for a loan someone else has taken, and they have defaulted on payments then you too will lose out on your credit score as it will reflect in your report as well. The best way to avoid this is to ensure that the loans and cards are being paid for on time.
The only thing you need to keep in mind is that it takes at least a few months for the scores to increase so you need to strap in for a bit of a wait before your scores start showing any improvement.
8. Opt for Different Types of Credit
Credit, if used carefully, can be beneficial because a person who has never had any type of credit has a lower CIBIL score, making it more difficult for them to receive loans. You can improve your credit history and increase your CIBIL score by taking up a few loans that may include a mix of secured and personal loans, as well as long- and short-term loans.

How can you find a Good Credit Score?
A CIBIL score ranges from 300-900, 300 being the lowest and 900 being the highest. Your CIBIL points should be closer to 900 to get the best deals on interest rates for loans. A CIBIL score of 750 and up to 750-900 is considered ideal by the majority of lenders like banks and non-banking finance companies (NBFCs).

Why Your Credit Score is considered to be Important?
Making money in this world is not hard, provided you have one key ingredient – Money. We live in times where we need money to make money, and we often spend precious moments of our lives thinking about how to make this money. Given the risk involved in lending, almost all financial organizations rely on certain criteria to gauge the repayment capacity of an individual. A credit score is perhaps the single biggest determinant when it comes to your availing of a loan, which makes it critical for us to maintain our scores.

The reasons behind scoring Low CIBIL score
There are many reasons for a low CIBIL score. A borrower’s score can reduce because of his/her own errors and due to errors made by banks. Generally, mistakes made by banks include wrong information sent about a borrower to CIBIL and failure to update records among others.
The main factor that affects the CIBIL score of a person is his/her own behavior. The way borrowers deal with their finances can increase or decrease their scores. Most scores fall because of the past behavior of the borrowers. Some of the common errors that borrowers make are
1. Outstanding Credit Card Balance – Some borrowers do not pay their total credit card bills every month and only pay the minimum amount due, which leaves them with an outstanding balance on their cards. What they do not realize is that this can reduce their credit score.
2. High credit usage – If a borrower uses over 30% of his/her credit limit, then it negatively affects his/her score as it shows his/her dependency on credit is high.
3. Delay in repayments – If a borrower delays in making his/her EMI payments, then it will be noted in his/her CIBIL report, which will reduce his/her credit score. Repayments are one of the important factors that are considered while calculating the credit score.

The effects on your Credit Score
A Credit Card can affect your Credit Score. Read this and use it wisely to positively impact your Credit Score. Paying only the minimum due, maxing out your credit limit, skipping payment due to a dispute and multiple rejected applications affect your Credit Score negatively.
● Minimum Payment only Paying your bill regularly is a good thing, but paying only the minimum due is not. It casts doubts about your financial stability.
● Maxing out your Credit Limit It’s ideal not to use more than 60% of your credit limit. If you max out your credit, it’s taken as a sign that you rely too much on credit.
● Rejected Applications If your Credit Card application gets rejected for whatever reason, especially more than once, it will damage your Credit Score. So, make sure you provide the correct information to avoid rejection.

Try to maintain your CIBIL Score like a Pro
There are some of the important factors that affect your CIBIL score, not just bad credit behavior in terms of payments and credit limits, etc. Credit choices and their related areas can also affect your score. Some reasons are listed below:
Credit Utilization – When you use the option of credit you should always keep in mind the Credit Utilization Ratio. This ratio is a comparison of the amount of credit you have used to the amount of credit you have balanced. This ratio amounts to 30% of your actual score.
Loan Enquiries – If you want to buy a new car or get a loan to buy your dream home, you would like to check with a few banks before you make your decision. Making multiple inquiries can raise a red flag against your name and in turn affect your score drastically. For every inquiry you make with a financial institution, your inquiry gets recorded, and affects your score making it difficult for the bank to decide to provide you with the credit. Every inquiry brings down your CIBIL score.

FAQs
If you have missed payments on any of your loans over the years, your credit score would be negatively affected. A higher utilization pattern equals more repayments and, therefore, negatively affects your score.
How do more personal (unsecured) loans affect your score?
More number of personal (unsecured) loans would also affect the score in a negative way since such loans have a high rate of interest compared to a car or home loan and, therefore, are more likely to result in defaults.
How can I improve my credit score?
● Timely payment of EMIs results in a clean credit history
● Makes full payments on your credit card instead of the minimum payment. If all else fails, try to make the minimum payment.
● If your utilization of credit limit has been low, it will have a positive effect on your score.
Is there a chance for your CIBIL score to be improved?
A CIBIL score is a representation of your entire borrowing history. It’s a representation of a trend, which means that if you’d defaulted on a loan in the past, merely paying off a few credit card bills on time won’t raise the score drastically. You’ll need to thoroughly involve yourself in a routine of honoring payments on time, every time, taking more secured loans as compared to unsecured loans, and never missing a credit card payment. The score will improve gradually, as you keep honoring your debts.