A high credit score increases the likelihood to get quick loan and credit card approvals. All financial institutions verify the credit score and credit report of an individual before offering credit.
So, a person needs to increase their credit score from 750 to 800 in order to improve creditworthiness. However, there is no shortcut way to enhance credit score, it requires a lot of time and effort.
How to build a CIBIL score between 750 and 800?
Although lending institutions consider factors such as income, debt, and employment history, retaining a healthy credit score between 750 and 800 increases the chances of getting loan or credit card approval considerably. There are several approaches by which an individual can boost his/her credit score. They are as follows:
Paying bills on time
One of the best ways to improve the CIBIL score is by paying the dues before the deadline. While availing loans, individuals need to ensure that they repay the EMIs without fail. Also, in case of credit card payments, the cardholder must be aware of clearing the credit card bills on time to avoid the credit burden that can significantly affect the credit score.
Fortunately, lending institutions only generally report about missed payments to credit bureaus once they are 30 days past due. So, when a person fails to clear a bill before its due date, he/she should pay that outstanding bill within the time provided.
Checking credit report periodically
Another ideal way to maintain an exceptional credit score between 750 and 800 is by keeping a track of credit reports once in a while. People can conduct their CIBIL score check online for free by visiting the website of CIBIL. While checking the credit reports, an individual can track the remaining dues or delayed payments, missed payments, etc. of loans and credit cards, which are responsible for affecting the credit score.
Besides, it enables an individual to check the information recorded in their credit reports so that, in case any error or negative information appears, he/she can easily determine it and report it to the respective credit reporting company for correction. This way, a person can retain a healthy CIBIL score between 750 and 800.
Limiting credit utilisation
Another effective approach to increasing credit scores from 750 to 800 is by limiting the usage of credit cards as much as possible. In other words, a cardholder should only use their credit card in the event of an emergency and keep the bill of their monthly credit card between 30% and 50% of the limit.
For example, if an individual holds a credit limit of Rs.50000 per month, his/her usage should not exceed Rs.25000 every month, or else the credit utilisation ratio increases, thereby affecting the credit score negatively.
Availing one credit product
People having a poor credit history can likely come across difficulties while getting approvals on their loans. Even if the loan request is approved, they are charged a high-interest rate, which can be overwhelming for borrowers.
Therefore, availing at least one credit option like a credit card can be a feasible option for retaining a healthy credit history. This will help keep the CIBIL score between 750 and 800, which is ideal as considered by most lending institutions.
Improving credit mix
An individual can be benefitted by having a secured and unsecured credit mix. For instance, when a person possesses unsecured loans, such as business loans or personal loans, availing some secured loans such as home loan or loan against property makes sense.
Furthermore, availing a new credit card can diversify the credit mix that determines 10% of the credit score. Also, by increasing the credit limit, an individual will be able to reduce his/her overall credit utilisation ratio, which in turn helps in enhancing the credit score substantially.
Having a comprehensive idea to increase a credit score to 800 may help an individual to pursue those habits, which make them creditworthy and get loans and credit card approvals quickly. So, individuals should follow this guide with diligence since having a high credit score helps in maintaining a proper creditworthiness.