A bad CIBIL Score can have devastating effects on your financial future. Imagine needing a loan urgently due to an emergency, only to have it declined because of a poor credit history and a low CIBIL Score. The need for a loan can arise unexpectedly, and during such times, a bad CIBIL report can worsen the situation. Below, we have listed some powerful strategies as your guide to improving a bad CIBIL Score quickly.
Why Your Cibil Score is Bad?
There are plenty of reasons that can contribute towards a bad Cibil score. However, here we will highlight the top reasons that lead to a bad credit score and a bad credit history.
- Written Off Loans: If a lender gives up on you and writes off your loan, it’s like a scar on your credit report. It means you’ve been marked as a high-risk borrower. This remark will stay on your credit report for a very long time and it will almost never let it climb up.
- Loan Defaults: The biggest red flag for lenders, loan defaults occur when you fail to repay your loan. It’s like a signal flare indicating financial distress, and naturally, it impacts your credit score.
- Delayed Payments History: Consistency is key in finance. Regularly delaying your payments paints a picture of unreliability. Even if you’ve missed a couple of credit card payments, it can cause significant damage to your score.
- Settled Credit Cards: A lot of times people end up over using their credit cards and get trapped in the never-ending cycle of high interest rates. Eventually, the card holder gets exhausted financially and opts for a credit card settlement. This one-time settlement seems like an easy way out of the problem at that stage. But most credit card users are unaware that this will cause a severe negative impact on their credit score.
What You Can Do to Improve Your Bad Cibil Score Quickly?
Improving your Cibil score isn’t an overnight process, but with the right strategies, you can see a considerable improvement.
- Pay off your defaulted loans and Clear Write Off Status: A written off loan is like a permanent scar on your credit report. The only way to remove the scar is to repay the bank or financial institution. Contact the respective bank directly and request them to give you a chance to clear off the outstanding amount of the Write-off Loan. The best way to do this is by email. Request the bank the total dues amount and ask for a “All Dues Cleared letter” to be issued against the repayment and closure to be reported to CIBIL. If the bank is willing to do this then you will be taking the biggest step in repairing your CIBIL credit score.
- Maintain your Existing Credit Liabilities: Make timely payments of your loans and credit cards if you still hold any. Because after repaying off your Written-Off loans, these existing lending products can contribute significantly towards your credit score improvement. Ensure all your EMIs and credit card bills are paid on time. Setting reminders or automating payments can be a game-changer.
- Credit Utilization Ratio: If you still hold a credit card despite being a defaulter then ensure to keep your credit utilization under 30%. It shows you’re not overly dependent on credit.
- Get a Credit Card against Fixed Deposits: If your Cibil is really bad then your best option to repair your credit score would be opt for a Credit Card against a Fixed Deposit. Choose a leading bank like HDFC, ICICI, Axis or any other top bank that gives you a Credit Card against opening a Fixed Deposit. Even though if it’s a secured lending product, it will help you to build your Cibil credit history.
- Monitor Your Credit Report: Check your Cibil report regularly for errors. Sometimes, discrepancies can drag your score down. If you notice any errors then you can raise a request to rectify it immediately. This will save unnecessary score drop downs.
- Limit Credit Enquiries: When you already know that your credit score is bad then what’s the point of spoiling it further by enquiring for lending products. Every rejected credit enquiry will have an additional negative impact on your credit score. So, avoid seeking loans for some time.
- Avoid Cibil Repair Scams: There is no reset button for Cibil or a clean slate. Remember this fact, only you can improve or spoil your credit score. If you follow the steps that we have explained then you don’t need to opt for any third-party agencies to rectify your Cibil score. The fact is that no one can Fix your Credit Score apart from yourself.
How Much Time Will It Take to Improve Your CIBIL Score?
Patience is vital when it comes to improving your Cibil score. Generally, it takes about 6-12 months to see a noticeable change, provided you’re diligently following the above steps. Remember, building a good credit score is a marathon, not a sprint. It’s about consistent financial habits and smart credit management.
Conclusion
A bad Cibil score isn’t the end of the road. With informed decisions and disciplined financial behavior, you can fix your CIBIL score and improve your credit history. Remember, your Cibil score is a reflection of your financial health, so take good care of it!
Frequently Asked Questions
How to get a loan if my CIBIL score is bad?
If your Cibil score is bad or if its below 650, then its will be difficult to get a loan. You might get a loan from some NBFC’s at a very high interest rate.
How to improve bad Cibil score and report instantly?
A Bad Cibil score cannot be changed or improved in a month. Meaning start by paying off your bad loans. If you follow the points mentioned in our above article then you can surely improve you bad Cibil score.
How can I improve my credit score in 30 days?
Yes, you can increase you credit score in 30 days but it won’t be a considerable change. You might notice a nominal change of 5- 10 points depending on your overall credit history. Your Cibil score is calculated based on a variety of parameters. You can expect a noticeable change only after a couple of months.
Can credit repair agencies help me to change my Cibil Score in 30 days?
You would be fooling yourself if you fall prey to such things. Only your own positive actions can repair your Cibil credit score and report.
How can I remove “written off” status from my CIBIL report?
Yes you can remove “Written Off” status from your credit report. But to do that you need to pay off the total outstanding amount you owe to the respective bank in full. After this, if the bank is willing to give you a “No Dues Certificate” then you can expect the written off status to be removed and changed on your Cibil report. The bank needs to report to update Cibil that the outstanding loan is paid off.