How to Increase Your CIBIL™ Score from 600 to 750 - 10 Effective Tips & Tricks

In the current financial ecosystem, having an understanding of how to improve your CIBIL™ score from 600 to 750 is important since it will help you qualify for loans, credit cards and securing lower interest rates. Average CIBIL™ scores vary between 300 and 900, where ideally, a score of 750 & above is considered favourable by lenders processing your credit card or loan application. If you are currently at 600, it may be difficult to qualify for financial products with favourable terms. But, CIBIL™ Scores are not fixed; with a healthy financial management and a few changes to your credit habits, you can absolutely fix your CIBIL™ score in a short span of time.

The easiest ways to improve your CIBIL™ score are primarily better credit behaviour and timely financial choices. Whether it is keeping your credit utilization under control or paying off balances, the ways to fix your credit score are very simple.

What is a CIBIL™ Score? Why Should We Take Steps to Improve Our CIBIL™ Score?

A CIBIL™ Score, or Credit Information Bureau India Limited score, is a 3-digit number that assesses your creditworthiness based on your credit history. It is a 3-digit score based on the scale of 300 to 900 and it indicates your reliability in handling credit so that lenders can more easily decide on your loan or credit card application. A score above 750 is low credit risk for lenders, so you get a quicker approval with a higher limit and lower interest rates.

But if you have a score of around 600, it will be difficult for you to find lower interest rates and other terms & conditions on loans and credit cards. Knowing how to boost your CIBIL™ score from 600 to 750 will improve access to financial products, so that you don’t end up paying through your nose with high-interest rates or worse getting a loan rejected.

Additional Reading: What is the best CIBIL™ Score

Key Factors that Affect Your CIBIL™ Score

Understanding what influences your CIBIL™ score makes it easier to raise it from 600 to 750. Your score consists of several different components, each affecting your credit profile in a different way. Focussing on these areas, you can construct a plan to raise your CIBIL™ score of 600 to something higher as well like about 750 which is much better for financial options and credit.

Payment History: Timely payment is very important. When lenders see that you have late or missed payments, or perhaps multiple late payments, it can make them reconsider your repayment capacity, and thus lowering your score significantly.

Credit Utilization Ratio: This is the amount of credit you use compared to your total limit. An ideal credit utilization ratio is below 30% which can help boost your score.

Credit Age: A longer credit history indicates that you have utilized credit responsibly, and better CIBIL™ Score over time.

Credit Mix: A combination of both secured (home loan) and unsecured loans (credit cards) results in a better score.

Too many Credit Applications: A lot of new applications for credit (each leading to a hard inquiry) can hurt your score as it may indicate you are desperate for credit.

Also Read:Applying For A Loan With A Poor Credit Score

10 Tips to Increase Your CIBIL™ Score from 600 to 750

1 - Pay Your Credit Card Dues on Time

To see your CIBIL™ score rising, nothing works as well as regularly paying credit card duns on time. Payment delays entail fines, and above all, damage your credit rating. Do not just make the minimum payment because that can leave you paying interest and adding on to your debt for many years. Payment of dues on time reflects your credit profile with a positive impact which gradually increases CIBIL™ score.

2 - Maintain a Low Credit Utilization Ratio

A credit utilization score higher than 30% is bad for your CIBIL™ score. Ensure to you use less than 30% of the credit card limit on each one, this way your score will go up. If this seems difficult, you can ask your bank for a credit limit increase. It may sound silly but your CIBIL™ Score will gradually improve from 600 - 750 with higher limit and less usage.

3 – Do Not Apply for Multiple Credit Cards or Loans Simultaneously

Having several lines of credit, or even a combination of them, may sound advantageous. But having too many credit cards or loans at the same time can sound warning bells to lenders. Applying for too many loans or opening different credit cards at once can make you look like someone dependent on credit. This has an adverse effect on your CIBIL™ score and reduce your chances for credit approval. So, avoid this by applying for credit only when needed and maintain a few accounts open.

4 - Check Your Credit Report Regularly

Your credit report could have errors or mistakes that could negatively affect your CIBIL™ score, so it is important to check it regularly. If you have errors (wrong personal information, incorrect credit limits or missed payment recorded incorrectly), they automatically lower your score. By reviewing your report from time to time, you can catch errors and dispute them with the credit bureau. Correcting these mistakes on time gives you a far better chance to increase your CIBIL™ score from 600 to 750 as compared to using any other strategies.

5 - Maintain a Healthy Credit Mix

Having a well-balanced mix of different credit types, including secured vs. unsecured credit in your portfolio, is another point that can easily improve you CIBIL™ score from 600 - 750. A combination of home loan (secured) and a personal loan (unsecured), for example, demonstrates a healthy mix of credit across different categories. It shows that you are capable of handling different types of debt, which is good for your CIBIL™ score. Strike balance as it reflects steadiness, which can aid you in lifting up your numbers.

6 - Avoid Applying for Credit Too Frequentl

When you apply for a new credit card or loan, your lender will pull a so-called "hard inquiry" on your credit report which lowers your score for the next 3 months. When you apply for credit too often, that can raise a red flag to lenders as they think you are desperate for credit. Waiting a reasonable amount of time between credit applications gives your score the time it needs to bounce back from inquiries. This will also keep your CIBIL™ score from dipping repeatedly if you keep applying, so within no time you can go from a 600 to a 750+.

7 - Think Before Closing Old/Unused Credit Cards

It may feel right to close a credit account but it impacts your credit utilization ratio as well as lowers your overall credit limit, which can affect your CIBIL™ score. For example, if you have an unused credit card from years back, keeping the balance at zero can keep that account open and count towards your credit age as well as a lower ratio of utilization. Be cautious when closing an account — it can affect your score.

8 - Set Up Automated Payments to Avoid Missed Dues

Using automated payments to pay credit card dues and loan EMIs will help you avoid missed payment defaults — critical for a good credit score. Payment defaults and missed payments can impact your CIBIL™ score adversely. When you're looking to push your CIBIL™ score up from 600 to 750, having a history of on-time payments is essential, and automated payments help deliver this. It is important to keep an eye on these payments regularly so as not to take technical issues.

9 - Consider Consolidating Debt

If there are several high-interest debts you are managing, then one way to manage your payment burden is by way of debt consolidation. Debt consolidation is the process of taking a single loan to pay off nearly all your debts, preferably with a lower interest rate. Such a strategy can ease the burden of repayment and help you accelerate these payments through proper financial management, which improves your credit profile as well. Debt consolidation can improve your CIBIL™ score when done correctly by simplifying the repayment process.

10 - Work with a Credit Counselor if Needed

Credit counsellors are individuals who can help you find ways to manage your debts, budget and develop a plan that will help you determine the best way to repair and improve your CIBIL™ score. They guide you with CIBIL™ score improvement methods and help you achieve a higher CIBIL™ score of 750. But, beware! Ensure to use only an experienced credit repair services of good reputation.

How Long Will It Take to Increase My CIBIL™ Score from 600 to 750?

It takes time, financial discipline, and consistent, positive credit habits, to increase your credit score from 600 to 750. Generally, it could take at least 6 months (or close to a year) to start noticing significant improvements in your CIBIL™ score. Focus on paying our bills on time, controlling your credit utilization, planning for a balanced credit mix, are some of the financial habits that can help you achieve your 750 CIBIL™ score faster.

Tips to Increase your CIBIL™ Score – FAQs

Disclaimer

The 4 credit bureaus- CIBIL™, Equifax, Experian, and CRIF highmark offer credit scores in India. The points mentioned above are true for credit scores from any bureau, not just CIBIL™.