In today's fast-paced environment, whether you plan to buy a new house, purchase a car, or secure a loan from a bank for any other pressing requirement, your Cibil score plays a massive role. Before approving any loan, financial institutions routinely check this specific score first. If your score is in good shape, the probability of getting the loan approved increases significantly, and you may even secure it at a lower interest rate. Conversely, a poor score can create massive hurdles in obtaining credit. Naturally, this raises important questions about what a Cibil score actually is, how to keep it above 750, and how to recover if the score drops unexpectedly.
Understanding Cibil Score and Credit History
According to economist Akash Jindal, a Cibil score acts as a comprehensive record of an individual's past loan repayments and credit card usage history. This means that whether you took a loan previously and cleared your EMIs on time, or whether your credit card bills were paid before the due date, every single action directly impacts your Cibil score. Put simply, the score demonstrates how honestly and responsibly you return the money borrowed from a bank. If you consistently make payments on time, your financial track record remains clean, which successfully builds the bank's trust in you.
Effective Steps to Maintain a Score Above 750
Akash Jindal explains that the simplest way to maintain a healthy Cibil score is to ensure that all your loan EMIs and credit card dues are paid strictly on time. You must avoid delaying payments in any given month and steer clear of bouncing cheques at all costs. If you have taken a loan from a bank, paying both the principal amount and the accrued interest within the designated timeframe is absolutely essential. Maintaining an uninterrupted streak of timely repayments builds a solid credit profile and keeps your Cibil score strong and resilient.
Major Benefits of Having a High Cibil Score
The primary advantage of possessing an impressive Cibil score is that banks willingly step forward to approve your loan applications without demanding tedious formalities. Furthermore, your chances of receiving funds at highly competitive, lower interest rates increase manifold. According to Akash Jindal, a strong score opens up multiple banking options, allowing you to choose the best lender suited to your needs as various institutions compete to offer you credit. On the other hand, a weak score complicates the borrowing process, and certain lenders might only offer loans at exorbitant interest rates.
How to Revive and Fix a Damaged Cibil Score
If an individual's Cibil score has witnessed a sharp decline, the immediate priority should be addressing older pending loans and overdue EMIs. Akash Jindal suggests that borrowers with delayed dues must start clearing their balances immediately to mend their standing. Following that, individuals should ensure that future EMIs are never delayed, credit card bills are settled on schedule, and cheque bounces are completely eliminated. Persistently adhering to timely repayment habits gradually revitalizes your payment track record and lifts your overall credit standing.
Assessing Your Income Before Borrowing Money
Akash Jindal points out that taking a loan is not inherently wrong, but borrowing recklessly without careful planning can trigger severe financial distress. Therefore, before taking on any debt, you must carefully evaluate your total earnings and calculate the surplus amount left after covering monthly expenses. If you borrow in strict alignment with your income levels and comfortably service your EMIs, your Cibil score will remain robust over the long term. It is always wise to maintain strict financial discipline and borrow only that specific amount which you can easily repay without straining your finances.
