Poor CIBIL score reflects broken finances. It not only hurts your credit worth and makes you ineligible to draw loans and credit cards from banks but also hurts your confidence. So as important it is to rebuild the worth as is to stay optimistic while restoring your credit score.
In order to improve score you need to care for five important factors that directly affect your credit score calculation. These are the repayment history, credit utilization ratio, credit mix, length of loans and recent loan queries. Taking care of all these factors helps you maintain a decent score and stay credit ready all the times. But sometimes your score plunges down without your fault. When your score falls unknowingly it is even more important to keep the patience and find the reason behind. If required you may need to raise the dispute as bad credit fix. As the first step you should pull out a free copy of credit report from CIBIL. Calmly, collecting all your wits you should study the report. Ensure that all the personal details and account details are correct.
If you find an error you need to immediately raise a dispute and get it corrected. Sometimes wrong personal information on the report may create wrong observation about your credit score. Such mistakes are generally corrected as you report to a credit agency. However if you find any of the unknown account information such as an unidentified credit card application or a loan query, or for that matter an open loan on your name, you still need to keep the calm and stay positive. The information certainly cites that an identity theft has been made on your name but you cannot reverse the situation instantly. To trap the miscreant you need act smart. A quirky query is basically an alarm bell before the loss and you should be thankful for having found it beforehand. However the money being stolen from the account from credit report or by the way of loan can only be restored after you could trace burgles. The latter is an extreme case and it is unlikely that you would fail to identify such movement on your account. But if it does happen, only people in authority can help you. Report the case and act as per the legal framework.
Another factor pinching your score could be misreporting of a closed loan account as open account or default of payment. This significantly hurts the credit status and the score tumbles down. However the current review of the report should give you a lifetime advice to maintain the score. You should check your credit report at least three times a year. This helps in protecting your finances. If however after studying your report you do not find any fault in your personal and account information, the next step should be to check all the 5 major factors in your credit history. If you have bad history you need to take steps to improve your history and thus improve cibil score. Ensure that you do not have pending bills on your credit cards. By keeping balance on your cards you basically use the limit and thus it affects your score. Rolling over balance every month also affects your score. In the same lines, stay current on all accounts. If you have been late on payments, it’s time to get disciplined on the matter.
The good history of repayment would improve your score. You can automate the payments to ensure timely payments every month. In case you have too many loans and bills and you find it difficult to manage the debts, you should meet your creditors and look for ways to make the loan affordable. You can consider debt consolidation. As you begin to pay on time, it would gradually build your history. The length of credit also affects your score. If you open several new accounts in a short time, it would not help your history. Your score may fall instead. This is why, it is recommended that you do not close the oldest card with good history and not apply for multiple credit products all of a sudden. The new accounts should only be opened when you plan for their repayment.
Paying back on time goes a long way in raising your score in future. All in all, restoring a good credit score is all about restoring errors on your credit history. With bad credit history, you need to take efforts to build a new credit history. A lot of patience and discipline goes a long way in the process.