CIBIL Score कैसे बढायें - How to Improve CIBIL Score - YouTube

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Namashkar my name is Mukul and welcome to asset yogi

Where we do not lock the knowledge of finance but unlock it instead

This video is part of a video series in which we are covering CIBIL Score

In the first video, we saw what is the concept of CIBIL score

How a good CIBIL score can help you get a loan

Any type of loan or any credit facility

Then in the second video, we saw how you can check your CIBIL score online

You can also view the credit report and what kind of information it gives

You get this complete information from CIBIL's website

It is available for free, there are no charges for any kind

So if you have not seen both of those videos, then you should watch those two videos first

In this video, we will see how you can improve your CIBIL score

or if you already have a high CIBIL score, so how can you maintain it?

You should know about that too

I have said in many of my previous videos that if your CIBIL score is above 750

then it is considered as a good score, you can get a loan very easily

Now it is out of 900 and if your score is more than 800 then you get a loan very easily

For this reason, you need to maintain a good CIBIL score

So in this video, we will see on what parameters the CIBIL score depends

And how you can improve it

So you must watch these videos from beginning to last

so that you do not miss any important parameter

Let's go straight to the blackboard

So before we learn how to improve our CIBIL score

First of all, we have to understand why our CIBIL scores drop

I have made a video on the calculation of CIBIL score

And in that, I told what kind of weightage is there

So if you haven't seen that video then watch it, then you will find the link in the description

Still I will summarise it all once

Our CIBIL score range from 300 to 900

It calculates the probability of, that what is our default probability

That if we take a loan or credit card, we will make its payment on time or not, Right

So 900 would be your maximum score

And we consider a score above 750 as a good score on which we get loan easily

Then the weightage of the credit score includes

the score of 30% in it depends on your past performance

Whether you have made repayment of loans in the past

or have you did some defaults

Second is your credit mix and duration,

What is the mix of your unsecured and secured loans, Right

Leverage is your third point, That's also 25%

Leverage means that what percentage of your total credit limit do you use

And there are some other factors which comprise about 20%

Let's see why our credit score actually drops

So first of all our loan repayment can be due or we can do some defaults

And this is the biggest reason

if you do default in any of your loan repayment or credit card repayment

So because of that our credit score drops

Now it can have different reasons

It can be some financial hardship

You may not have sufficient money for that month

You may be facing job problem

Or maybe you've missed payments on your credit cards

It has been missed by mistake, it can happen

In some cases we get disputes

Either with the company of the credit card or you have to make a repayment in the bank

So there will be some kind of dispute

You may have had a fraudulent transaction on the credit card

Sometimes companies impose some extra charges, Right

Maybe you don’t know clearly about the annual fees

So because of this kind of dispute, we sometimes miss this payment

And we try to settle with the credit card people

But we forget that it’s impacting our credit score

And in the future, we may have a lot of trouble getting credit or a loan

especially if you have a default of any kind

So your credit score drops very quickly

Let’s assume if you have a score of 800 then in 2-3 months it can drop to 650

can be less than this if your default is too big

So your effort should be that there must be no default of any kind

I will give some tips related to this later, in this video

Let us go ahead and see what else causes our credit score to drop

if you take too much of unsecured loan

Special if you take too much of credit loan or personal loan

Specially according to your credit limit

Even then your credit score can drop very quickly

Because even on this the score is 25%, Right

So what happens in the unsecured debt is that as there is no security behind them

Bank or any financial institution hesitates when giving an unsecured debt, right

So they always check your credit score to see how your past performance has been

So if your secured debt is very less, personal loans or credit cards are more

so your credit score could drop

I had talked about leverage to you

Assume that your total credit limit is 50 lakhs

And if you are already using a credit limit of 40-50 lakhs, then this is also have a negative impact

If your credit card limit is 50,000 Rs

then suppose you spend 40-50 thousand Rs every month out of that

So that too would have a negative impact

Then there are some other factors also like

If you generate more loan or credit card inquiries, in less time

let's say in 3-4 months you apply for 3 loans, Right

So this also has a negative impact

so about them, I have already talked to you

This credit score was talked about in the credit weightage video

How can the credit score be calculated?

Apart from this, there are some factors

like if you have taken a joint loan

So the effect of joint loans is on all of the borrowers

For example, Husband and wife have taken a joint loan

So credit score of both will be impacted

Even if only one of them is making the payment, Right

But the credit score of both will be impacted

if you have issued an add-on card, and the main cardholder did default on the payment

So your score will also impact, So many people do not know these things

Then if you are a guarantor in any loan

Then many times people say that one only has to do a signature just has to become a guarantor

But you should understand that if the borrower did some default

then the credit score of the guarantor will also be affected

In fact, Bank will demand the guarantor to do the repayment, Right

So legally you should understand that being a guarantor means

if the borrower does not make the payment

then its guarantor's responsibility to repay, Right

Then if your company has taken a loan

in which you are a partner, proprietor, a director or you are a guarantor in a loan

Still, your credit score will impact, Now many people miss these 4 points

So is there a joint account of any kind, whether it is a credit card or if you are a guarantor

So you should know that your credit score will also be affected by it

Then many times inaccurate information goes in your credit report

Now what can be an inaccurate information

So there may be some inaccurate open accounts

So you should check all of the open accounts you have

Whether it is closed or not, is it still reflecting wrong

Or maybe you have made a partial or full repayment

But it may not be reflecting

If you have settled any loan then it may not have been updated

If all this information is not updated

then your credit score may also drop because of that

So for this, you can also go to the consumer address forum in CIBIL

or you can also coordinate with your bank

We will see about it in detail now, about what steps can we take?

So these are the 6 main reasons due to which your CIBIL score drops

Now let us see what action should we take

as if our CIBIL score is low then how can we improve it

And also if our CIBIL score is high then how can we maintain it?

The very first thing that I am saying from the last few videos

is that you should pay all your loans and credit cards on time and make full payment

This is the biggest reason for our low credit score

So if you have missed any EMI due to any reason

or missed any credit card payment in 1, 2 or 3 months, even if your reasons are genuine

So as soon as your situation gets better, you should pay all your dues

And should pay the full amount, Right

then another, Sometimes we miss our payment by mistake

We do not remember to pay on time

So in this situation, use automatic payment mode

In fact, my personal favorite is the electronic clearing system

Just put ECS with your bank account and

your credit card payment will be done automatically

There is the facility of ECS for loan repayment as well

And if you are not very comfortable with online then you can also issue post-dated checks

You will not be worrying about making the payment on time every month

Then if there is any dispute with your lender or credit card company

Any fraudulent transaction is done or extra charges are levied by them

The annual fee may have been imposed by them by mistake or maybe you didn’t know

So if you have any amount due in this way, then you can settle it

lots of banks, In fact, all of the banks and credit card companies, settle them

They settle any of the disputed charges of this kind

Suppose you have any dispute of 50,000

then your credit card company may tell you to settle it for 25,000

Just give 25,000 and both have a profit

You can also increase your credit score, And you will not be impacted much

So the settlement is done, you should try to settle it as soon as possible

Then I talked to you about the credit mix and duration

If you had unsecured credit like your credit card or personal loan, etc

Where there is no security of any kind, if it exceeds 20% of your total credit limit

So your credit score starts impacting

Now Quickly I will tell you how you can calculate your credit limit

Let me tell you a thumb rule

Let's say if you have a salary of 50,000 Rs, Right

So the bank says that you can make EMI or credit payments up to 25,000 every month

So you must assume your monthly credit limit is Rs 25,000

Now you multiply it by 100, then your total credit limit will come

So your Total credit limit is 25 lakh Rs, this is the thumb rule, Right

Now it can be less, or it can be more

Most of the banks consider it minimum

So if your credit limit is 25,000 rupees per month

As much EMI you will give, So your total credit limit becomes 25 lakhs, Right

Now out of 25 lakhs, you should try that

Not more than 20% of this should be spent on your credit card or personal loan

Or you can take from the monthly credit limit that if 25,000 is going there

If there is a monthly credit limit, then the total amount of EMI of your personal loan

should not be more than say 5000.

It should be less than 5000 if your monthly salary is 50,000 Rs

Or personal loan or credit card payment should not be more than 6000-7000 Rs

Then you should not take too many loans in a short time

Even if you have a requirement of 3 loans also

So it is reasonable in 18-24 months, but if you demand 3 loans in 3-4 month

so it's wrong it can negatively impact your credit score, right

then you shouldn't show your credit hungry behavior

here's the credit hungry behavior is if make payments of multiple credit cards

Lets assume ,lets say

Like I also talked about salary and suppose, if your total credit limit is 1 lakhs Rs

And let’s say you spend 70,000-80,000 Rs per month from it

So that too is negative behavior

It seems to CIBIL or banks that you have a

The habit of using too many credit cards and taking too many loans

then you should use less than 30% of your credit limit

If your credit limit is one lakh rupees then your spending should be less than 30,000

or take it according to your salary

If you have 50,000 Rs as your salary, then you should try that

You spend less than 15,000 on your credit card, right

So take a little care of this thing

after that, your EMIs should not be more than 40% of your monthly salary

If your monthly salary is 50,000 Rs, then you should try

So whatever your total EMI is, whether it is credit card payment

whether you took a loan, either a home loan or a car loan

So your total EMI should be less than 20,000

So if it is less than 20,000 then you will have a healthy credit score

Then lets move on

The fourth tip is that you should manage your credit card properly

So first of all you should not take any credit cards

Many people say that we revolve multiple credit cards

they make payment of one credit card with another

See it takes a lot of time to manage this firstly

And secondly, I haven’t seen a single person who earns a lot by revolving their credit cards

Or they get a benefit from it, ultimately it became your habit of taking credits

And you keep paying their interest

So you should take fewer credit cards, 1 or 2 credit cards are maximum enough

you don't need more than that

pay your payments in full no matter how many credit cards you use

Many times people think that I pay the minimum due but

What happens that you have to keep paying the interest on it

And that interest keep getting accumulated

And that payment of interest keep increasing

Simultaneously, your credit score also starts getting worse

Then if you have a financial hardship, for 1-2 months you really don't have money

So at least minimum due has to be paid

Because if you do not pay the minimum due, then it will be counted as default

And the credit score drops drastically due to default count, Right

So I am not saying that you always get the minimum due.

If you have a lot of financial hardship

then only you should pay the minimum due

Otherwise, you should try that I should pay all my credit in full

Then many times if your credit score comes down

then if you have to terminate any credit card means you have to settle

So settle that credit card where you have defaulted

If your old credit card has a good repayment history

then it helps in improving your credit score, Right

So if there is such a credit card where you have always paid it in full

then you keep it and you may not use it, fine, at least if your

credit card's history is good, then your credit score will be good

Now there is a fifth tip also

Many people do not pay attention to this, many people do not know that

you can also take alternate loans and credit cards

You can also improve your credit history

Your credit score may have already dropped

And you are not getting any kind of credit in the future

So in this case you can take loans against securities like

You can get a loan against FD, against LIC policies, can get a gold loan

Loan is available against mutual funds or shares

In this type of loan, your current credit score is not checked

But your credit score is definitely based on them

So if you make their payments on time then your credit score will start improving

Similarly, you also get these types of credit cards against securities

Like you get credit card against FD

You may not get a normal credit card if you have a bad credit score

So in this case you can take a loan against securities or a credit card against securities

So it will help you to rebuild your credit score

moving on, monitor loan accounts in case of joint loans

like I have talked about it earlier that

If there is a joint loan or you are a guarantor in any loan

or if your company has taken any such loan where you

are a partner, director, a proprietor, or a guarantor within a loan

then monitor these type of loans

Because your credit score will also be impacted if this leads to a default on loans

So you should always check that the repayment of such loans is always on time, Right

Then if there is any kind of inaccuracy inside CIBIL's credit report

then you must monitor that at least once a year

you should check your credit report at least once a year

In any way, if there is an incorrect open account

whatever open accounts you have first check them

If there is any inaccuracy in them, if anything wrong has been reported in the account

You may have closed one of your accounts and it is still reflecting, Right

So if there is any such an account, then you can report it

If there is any kind of discrepancies

You have settled any loan amount and it is not getting reported, finance-related rights

And it may happen that you have done your full repayment, yet it is showing partial

So if there is any such discrepancies

then you can go to the consumer dispute resolution of CIBIL and report online

Its link will also be given in the description

So you can report this, but keep one thing in mind that

this inaccuracy which you report will send by CIBIL to the lender, right

And the credit data will only be updated when the lender confirms it

CIBIL cannot correct any inaccuracy without the lender's confirmation

So you can definitely raise the dispute within CIBIL but

the correction will be done only after the confirmation of the lender

So these were my 7 tips

Now when you take this corrective action, you will make your payments in full and on time

you'll build your credit mix well

If there is any dispute of some kind if you report it, and after correcting them

So after that, you have to wait at least 6 to 8 months

because your credit score takes time to improve

Don't think that it will be done within 5 or 6 days

It improves slowly with time

and it takes at least 6-8 months to reach the level at which your credit score was maximum

So take care of this thing too

I think I have discussed as many tips as possible to improve the CIBIL score here

So if you will follow these tips, your credit score will start improving very soon

So that's all in this video

I really enjoyed making this video

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