Five Major Reasons Why Your CIBIL Score Could Be Low and How You Can Improve It!

1. Missed or Late Payments

A major determinative factor associated with your CIBIL Score is the record of your payments. A payment history that has either been missed or late on credit cards or loans begins to hurt significantly at this stage. A CIBIL Score is the cumulative of different factors, of which a Payment History has the most significant fraction, and thus, a single lost payment can decrease your Score. To counter this, one must organize for automatic debit or recurring payment instructions about bill payments to be made at the appropriate time.

2. High Credit Utilization Ratio

Credit utilization refers to the percentage of credit you currently use against the total credit available. A high ratio above 30% could mean that the borrower relies heavily on credit, and depending on what is to be posted on the CIBIL, it may have adverse effects on the Score. If you want to raise your credit score, then it is recommended to use at most thirty percent of your credit limit. This can be done by reducing the current balances to as low as possible and demanding that your creditors increase your credit limit.

3. Multiple Loan Applications

If an applicant goes around applying for several loans or credit cards in a short span of time then the credit reporting agencies are likely to list several hard inquiries against the concerned applicant, which will bring down the CIBIL Score. Each application can inform the lenders of your poor financial health and destroy your score. Hence, it is recommended that one applies for credit in moderation and make sure they qualify for new credit before applying..

4. Errors in Your Credit Report

Errors found on the report and the credit history can lead to a poor CIBIL Score. Typical mistakes are in the private data – name and surname, account number, and, respectively, account number of the debtor, as well as late payments that were recorded by mistake. A person needs to get the CIBIL Score Report checked at least once in a while to address these issues. Using Ruloans’ Free CIBIL Score Check Online, you can be able to Check your CIBIL Score and challenge any wrong entry without a decline in the Score. This way, your CIBIL Score Impact is the lowest, and you check your CIBIL Score Range.

5. Unpaid Debts or Defaults

Delays in payment or cases where one fails to make the payment are considered blocklisting on your credit report. These adverse remarks can linger on in the report for many years and drastically affect your CIBIL Score. If your Score is essential to you, then ensure you clear all your debts and do not make any more defaults. In case of difficulties with the repayment, it is better to address a financial advisor or turn to the services offered by Ruloans and restore the repayment schedule.