CIBIL Score: How to make CIBIL score 850+? If you know this secret, the bank will run after you to give you a loan..
When you go to take a loan, the first thing the bank asks is - "What is your CIBIL score?" This game of three numbers decides whether you will get a loan or not, and if yes, then at what interest rate. A score of 750 is considered good, but a score of 850... is the 'legend' level. For those whose score is 850, the bank makes them sit on a chair and offers them tea and water. They get the cheapest loan and the highest-limited credit card. So the question is, who touches this magical figure of 850 and can you also get it? The answer is - yes! You just need a little brain and discipline. Let's understand the whole plan from A to Z.
1. Who are those people whose CIBIL score is 850?
- These are old players
Their credit history (meaning the record of using loans and cards) is 10-15 years old or even more and is clean. Not a single payment is late.
- Smart users of credit card
They shop using credit cards but never pay the full amount. If the limit is 1 lakh, they never allow a bill of more than 10-15 thousand. This is called the credit utilization ratio (CUR), and they always keep it below 15%.
- They make a 'mix-veg' of loans
They not only have a credit card or personal loan (unsecured loan) but also a home loan or car loan (secured loan). CIBIL likes this mixture very much.
- Patient people
They do not apply for a new credit card or loan every 2 months. They know that every time they apply, their CIBIL score drops a little (which is called a 'hard inquiry').
Straight talk: These are the people who have made financial discipline a part of their lives.
2. The surefire formula to make CIBIL score 850: Make these 5 rules a habit
If you also want to join the 850 club, then start following these 5 rules from today itself.
Rule #1: Not a single EMI or bill is late
Take this in mind. Pay all your loan EMIs and credit card bills 2-4 days before the due date. Even a day's delay can tarnish your score. Smart tip: Set auto-debit in your bank account, the money will be deducted automatically, tension over.
Rule #2: Keep the credit card empty, brother
You have got a limit of 1 lakh, it does not mean that you spend the entire 1 lakh. Never use more than 30% of your total credit limit. And for the dream of 850, use less than 10-15%. The more you keep the card empty, the faster your score will go up.
Rule #3: Old gold, old card
Never close your oldest credit card, even if you don't use it. That card increases the age of your credit history, and the older the history, the better your score.
Rule #4: Don't apply for loans again and again
Unless there is an urgent need, don't apply for a new loan or card. Every time you apply, the bank pulls your CIBIL report and your score goes down a little bit. Be calm.
Rule #5: Keep an eye on your report
Be sure to check your free CIBIL report once a year. Many times, due to the bank's mistake, wrong information gets added to your report, which spoils your score. If you see anything wrong, immediately complain to CIBIL.
Straight talk: These are the people who have made financial discipline a part of their lives.
2. The surefire formula to make CIBIL score 850: Make these 5 rules a habit
If you also want to join the 850 club, then start following these 5 rules from today itself.
Rule #1: Not a single EMI or bill is late
Take this in mind. Pay all your loan EMIs and credit card bills 2-4 days before the due date. Even a day's delay can tarnish your score. Smart tip: Set auto-debit in your bank account, the money will be deducted automatically, tension over.
Rule #2: Keep the credit card empty, brother
You have got a limit of 1 lakh, it does not mean that you spend the entire 1 lakh. Never use more than 30% of your total credit limit. And for the dream of 850, use less than 10-15%. The more you keep the card empty, the faster your score will go up.
Rule #3: Old gold, old card
Never close your oldest credit card, even if you don't use it. That card increases the age of your credit history, and the older the history, the better your score.
Rule #4: Don't apply for loans again and again
Unless there is an urgent need, don't apply for a new loan or card. Every time you apply, the bank pulls your CIBIL report and your score goes down a little bit. Be calm.
Rule #5: Keep an eye on your report
Be sure to check your free CIBIL report once a year. Many times, due to the bank's mistake, wrong information gets added to your report, which spoils your score. If you see anything wrong, immediately complain with CIBIL.
3. How much time will it take to reach 850?
This is not Maggi which can be prepared in 2 minutes. It takes both time and patience.
- If you are new (no credit history): It will take 2-3 years to build a good score of 750+. And the journey to 850 can take 7-10 years or even more.
- If your score is poor (600-650): It can take 3-4 years to reach 750. After this, the destination of 850 is far away, but not impossible.
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