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Four ways to boost your CIBIL score using a personal loan

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How to improve your CIBIL score with a personal loan? Here are 4 ways

In the pursuit of improving one’s credit score, also known as the CIBIL score, individuals can explore various strategies. These include evaluating and correcting errors in the credit report, making timely credit card payments, maintaining a healthy credit mix, and keeping credit utilization low. Additionally, obtaining a personal loan can aid in enhancing the overall credit score by adhering to similar principles.

One key way in which a personal loan can help elevate the CIBIL score is by making regular payments. Timely repayment of EMIs is crucial to avoid any negative impact on the credit score. By not utilizing all available credit and diversifying the credit mix with a personal loan, individuals can potentially improve their CIBIL score over time. It is advisable to avoid multiple loan applications within a short period to maintain a positive financial image for lenders.

While the process of raising a credit score requires ongoing financial discipline, taking advantage of a personal loan can be a strategic move. Contrary to popular belief, income does not directly influence the credit score. Closing a credit account does not remove it from the credit history immediately, and checking one’s credit score does not harm it as it constitutes a ‘soft inquiry.’ In joint bank accounts, credit histories remain separate, and closing a credit card account may have a negative effect on the credit score if it reduces the overall available credit limit or closes one of the oldest accounts.

By understanding and implementing these strategies, individuals can work towards improving their CIBIL score and enhancing their financial credibility in the long run.

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