CIBIL Score: These are the 5 ways that will make your credit score meter run faster..

You start your first job. You have big dreams - to buy a bike now, a small house in the future, and a car too. The biggest way to fulfill these dreams seems to be a loan. You apply for a loan at the bank, but your application gets rejected within a few days. The reason? You do not have a CIBIL score.

When you check your CIBIL score in surprise, it does not have any number between 300 and 900, but 'NA' or '-1' is written there. What does this mean? It simply means that in the world of credit, you have not been 'born' yet. You do not have any credit history.

What is this 'NA' or '-1' thing?

'NA' means 'Not Applicable'. This score appears when there has been no loan or credit card in your name in the last 36 months. This score is not 'bad', but it is not 'good' either. It just shows that the bank has no past record to evaluate you.

Why is the score not formed?

You have never taken any credit product (loan or credit card).

Your credit history is not recorded in the banking system.

You have only kept a savings account or FD, but have not used credit.

That is why your CIBIL report may show 'No History', 'NA', or '-1'.

Why is a bank afraid of giving a loan?

Think, would you lend money to an unknown person? No. Banks also think the same. Without looking at your credit history, they do not know whether you are reliable in returning the money or not. Due to this, they do not take the risk of giving you a loan.

How will your score meter run?

If your score has not started yet, then it is important to follow the steps given below –

Take a Secured Credit Card
If you have an FD, then it is easy to get a Secured Credit Card in place of it. For example, you can get a card with a limit of Rs 15,000 on an FD of Rs 20,000. If you pay the bill on time using this card, then your CIBIL Score will start to improve in a few months.

Take a Consumer Durable Loan
Buy things like a mobile, a washing machine, or TV on small EMI and pay EMI on time. This also gets reported in CIBIL and helps in starting the score.

Add-on Credit Card
If someone in the family has a credit card, then you can take an Add-on card. Its use and payment will also help in building your credit history.

Correct use of BNPL (Buy Now Pay Later)
Many NBFCs and fintech companies provide BNPL limit. If they are reporting to the credit bureau, then your score will start building.

Loan Against FD or Gold Loan

You can prove your credibility by taking a small amount loan and paying EMI on time.

How long will it take to build a score?

Usually, CIBIL Score starts appearing after 6 months of continuous on-time payments. It may take 18 to 24 months to reach a score of 700+.

What mistakes to avoid

Do not depend on minimum payment, always pay the entire bill.

Do not apply for too many new credit cards or loans.

Do not use more than 30% of your credit limit.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.