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Sam Ghosh Founder and SEBI Regd. Investment Adviser at Wisejay Private Limited Bangalore, Karnataka
How to improve your Credit Score ?
1 answer/comment
09:19:00 AM, 15th May, 2019
  • Sam GhoshFounder and SEBI Regd. Investment Adviser at Wisejay Private LimitedBangalore, Karnataka
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    Say you are planning to buy an apartment or a car and will have to take a loan for that. You did a CIBIL score check as your bank suggested and found that your CIBIL score is below 750 which is considered a bad CIBIL score.

    A bad credit score may mean an inability to get loans. Even if lenders agree to give loans they will charge a high-interest rate. This high-interest rate gets translated to higher EMIs and the longer repayment period.

    In this post, we will look into how we can improve our credit score.

    But before that, learn what is a credit score-

    https://www.wisejay.com/openhouse/173/What-is-a-Credit-Score-and-how-lenders-use-it-CIBIL-Equifax-Experian




    POSSIBLE REASONS FOR A BAD CREDIT SCORE

    1. Inaccurate Information in the CIR

    CIR stands for Credit Information Report which contains details of your credit history and track records of availing and repaying credit. It is least to say that an accurate and updated CIR is fundamental to a good credit score.


    2. Missed payments

    Some of the missed payments may be caused by genuine financial hardship but also can be a result of operational issues such as non-receipt of statements or dispute over fees on credit cards. Also one can miss payments due to international relocation.



    SO, HOW TO IMPROVE THE CREDIT SCORE?

    1. Know your Credit Rating and Credit History

    You cannot improve what you do not know. Get hold of the CIR and understand what contributed to your bad Credit History. Look for inaccurate information and information which requires to be updated.

    You may find that some loan accounts which are supposed to be closed after you paid back the loan are still open. You may also notice loan accounts which do not belong to you.

    There can be discrepancies with the account statement. A “settled” or “written off” status affects your credit rating negatively.

    Also, check for discrepancies in the payment dates and due dates.


    2. Raise dispute in case of inaccurate information

    Credit Rating agencies have systems to raise disputes with them. In case the CIR is not updated with the latest information, get the latest statements from past lenders and submit them to the Credit Agency.


    3. Handling past defaults

    Whatever the cause be for past defaults, it is a better idea to pay past dues and settle with the lender.



    Related Links

    https://www.cibil.com/credit-score-repair

    CIBIL Dispute Resolution

    https://www.cibil.com/consumer-dispute-resolution

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