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How To Improve CIBIL Score After Settlement?
After settling your debt, improving your CIBIL score may seem difficult. But with proper planning, this can be achieved. Read on for the 5 tips to improve your CIBIL score after settlement.
Loan settlement is when the lender accepts to receive a loan amount less than the actual due amount. The lender waives this amount after understanding the underlying reasons for loan settlement. The reasons may include an accident, loss of employment, illness, or any other unavoidable circumstances.
Here are the 5 tips to improve CIBIL score after settlement:
1. Pay Bills Regularly
You must consistently pay all your bills on time. Clearing all dues, credit card bills, and other outstanding EMIs or debts within deadlines must be a priority. This exhibits your credit handling reliability and financial responsibility, positively impacting your credit score.
2. Continue to Utilise Credit Cards
Most people stop using their old credit cards, fearing reduced CIBIL scores. This is a misconception. Your credit behaviour reflects your credit score. So, if you don't use your credit cards, your credit score may worsen.
3. Maintain A Low Credit Utilization Ratio
Credit utilization is the ratio of the credit that you are currently using of the total available credit. You must try to keep this ratio below 50%. Constant high credit utilisation may indicate financial instability and impact your credit score.
ALSO READ :- How Can I Get a 900 CIBIL Score?
4. Establish a Mix of Credit
Having a varied mix of credit can positively impact your CIBIL score. Having only one type of credit account can hamper the perception of your financial health. You must always try to diversify your credit usage by obtaining a Personal Loan, credit card or auto loan instead of just going heavy on one. Having said that, it is necessary to borrow what you can comfortably repay.
5. Avoid New Credit Applications
A hard inquiry is triggered each time you apply for a new credit card or loan. You must avoid making multiple credit applications within a short period. It may give the impression that you are unable to manage credit and finances.
Improving your CIBIL score after settlement requires patience, consistency, and financial strategy. By paying bills regularly, keeping credit utilisation low, building a credit mix, and avoiding new credit applications, you can rebuild your score gradually.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
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Personal loans are one of the widely used funding methods that aid millions of people through difficult times.
If you have a CIBIL score of 750 and above, the chances of getting a loan at an attractive interest rate are higher. The CIBIL credit score is usually a value between 300 and 900.
Any individual who wishes to avail of a loan to meet their personal, professional or business requirements knows the importance of a CIBIL score.
What, if your CIBIL score is high? Why the CIBIL score is so important? If you are looking for answers to these questions, we’ve got the answers ready for you. A credit score is a 3-digit score given by any of the credit bureaus - CIBIL, Experian, Equifax or CRIF High Mark, based on your past and present credit behavior.
Loans have made our lives easier and simpler. From home loans to car loans to business loans, many types of loans are available in the market to cater to your different needs.
