5 Myths About Improving CIBIL Score That You Must Know

While people are looking for how to improve CIBIL score, many credit score misconceptions continue to propagate due to a lack of awareness. People have a hard time verifying the truth and application of these misconceptions and rumors. However, indulging in myths may sometimes get you into problems and keep you behind, in your quest on how to improve CIBIL score. As a result, here is a list of the most common myths, along with a truth check.

A Low Credit Record Is Permanent

Your credit score is a snapshot of your monetary history. However, this would not imply that a poor grade will follow you for the rest of your life. You may work to establish a positive credit history and, as a result, a positive credit score over time.

You can create a good score and let the poor deals disappear if you develop the routine of following all of the recommended practices and advice. A payment usually remains on your record for three years. Details like bankruptcy and payment defaults can be kept for up to ten years. However, there is still reason to be optimistic.

You Have Accessibility To The Credit File That Your Creditor Has Access To

It is a fallacy that a customer would have accessibility to the same edition of their credit report as a lender. A lender receives a complete version of your credit report from a credit rating organization. Alternatively, whether it is a free copy or a paid copy, you will obtain the credit report in a much more succinct way, with only the information you want.

Monitoring Your Credit Rating Might Lower Your Score

Reviewing your credit rating will have no negative effect on your credit score. If several creditors inquire about your credit information in a short period of time, it may harm your rating and offer the potential borrower the false perception. Keeping check of your credit score at scheduled intervals, say once per 3-6 months, is a smart habit to develop. It will serve as a wake-up call and provide opportunities to modify your financial habits if necessary.

The Credit Rating Is Determined By Your Annual Earnings

Your credit score is unaffected by your yearly revenue. With a yearly salary of Rs.6 lakh, an individual with an 813 score is attainable. It is also feasible for someone with a yearly salary of Rs.9 lakh to have no credit score and thus, no worries about how to improve CIBIL score. Your credit score is determined by the number of credit accounts you possess and how effectively you manage them.

If you have a yearly salary of Rs.12 lakhs and have never taken a loan or utilized your credit card, you may not have a credit rating at all. You may, on the other hand, have a yearly salary of Rs.6 lakh and a well-managed credit card. This will be beneficial.

A Credit Score Is Built By Using A Debit Card

Debit cards do not help you build a credit record or establish a credit score. Any transactions made with a debit card will not be considered to create your credit history or credit score because a debit card is a means to access your savings account balance and does not cover the idea of ‘credit.’ To begin building your credit history, you must obtain a credit card or a loan. Your credit score will be calculated when your credit history has been well settled. Moving from NA to a score, on the other hand, will take a few months.

Bottom Line 

By now you would’ve gotten a rough idea about how to improve CIBIL score & myths about it. A good credit score is important for your financial strength since it may help you get the greatest deals on credit cards and loans. So, it is necessary to concentrate on how to improve CIBIL score. Building or maintaining a good credit score by responsible behavior, on the other hand, is an ongoing effort. It is necessary to be aware of the ‘good and desired’ behaviors that have a favorable influence on your credit score and to avoid the negative ones.

James Sullivan
the authorJames Sullivan