Dispel all your fears due to CIBIL score. Here’s how

You have been told time and again that your CIBIL score should be above 750, if you want to access timely credit. But is all this hype about keeping CIBIL score high creating pressure on you, so much so that you are living in fear due to your CIBIL score? If yes, this is just what you need to read today.

You often hear that your loan application may get rejected if you fall short on your CIBIL score. As a result, you are so scared, that despite knowing that you must request for your CIBIL score at least once a year, you keep postponing it. You postpone it because you are scared to find out what you may see and what impact it may have on your plans to avail of home loan or any other credit.

If you are nodding in agreement, here are few things to do to dispel your fears about your CIBIL score.

Catch the bull by its horns

Yes, you heard that right! You need to face your fears, by pulling out your CIBIL report. It is a fairly easy process and you will receive your report right away on your email after you have gone through the steps as mentioned on the CIBIL website and paid the fee required to access your report. Once that is done, you need to take a close look at your CIBIL score. Needless to say, if it is close to 900 mark you have little to worry about. If it is below the satisfactory level of 750, do not panic! You need to keep your head above your shoulders and find out exactly what has been pulling down your CIBIL score.

Chalk out a plan

If your CIBIL score is low because you have not made regular repayments on your credit card or some other loan, fix that immediately. Examine your finances and see where you can cut corners. If possible, try and liquidate some assets to repay your credit card debt first. Credit card debt is the most expensive form of debt that you are servicing and the rate of interest you are paying on it can be as high as 38-40%. Once you have repaid this debt, ensure that you do not repeat the mistake.

Raise a dispute, if necessary

If your CIBIL score is low even after you have maintained an impeccable repayment track record, check if there is something amiss in your CIBIL report. For instance, you may have closed a loan account from your end successfully, but the bank in question has not forwarded the relevant details to CIBIL. As a result, your CIBIL score is taking a beating for no fault of yours. In such cases, raise a dispute with CIBIL right away. CIBIL has an efficient grievance redressal mechanism that will resolve your issue after it has verified the relevant details with the lender in question. Once your dispute has been resolved, your score will be restored to normal within a short while.

Relax! It’s just a number

At the end of the day, your CIBIL score is a yardstick of your financial health. Of course, you must make an attempt to keep it high, but don’t revolve your life around it. Instead try and build up healthy financial habits. First things first, draw up a financial plan, save for emergencies, buy adequate insurance cover and invest your surplus. As far as credit is concerned, don’t reach for the moon right away. Start small with a credit card and make purchases that you can repay in a single billing cycle.

Also inculcate other good credit habits such as keeping your utilization levels under 30%. If you follow these good financial habits, your
CIBIL score will automatically get a boost. The moot point we are trying to make here is that your CIBIL score is a reflection of your financial habits, so work on getting them right first.

(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)

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