How I can improve my CIBIL score ? Since none of the financial institution will approve my new loan application due to my past record.
If you are not getting any loans, this means you have serious issues. You obviously have been listed as a defaulter on databases of credit information companies such as CIBIL and Experian.

Having said this, please understand, there are no short cuts to improve credit score overnight. And there are no quick fixes either. If you hear from companies that offer to fix your credit score for a fee or remove you from the defaulters list for a price, it is false.

So how to improve a credit score. Remember, the credit report contains credit history of past seven years and shows everything including delay in credit card payment, enormous number of application for credit card or loans and delay in payment of EMIs, which can affect credit score.

Self-discipline in financial matters by paying back the borrowed amount (EMIs) on time and as agreed to the lender is the foremost step to ensure a good credit score.

#1: Always pay as agreed

All repayments – and missed ones – are recorded on your CIR. Missed payments and high outstanding amounts negatively impact your credit history and credit score. Pay your EMIs and credit card dues on time and as agreed to the lender.

#2: Joint and Guarantor credit accounts

Monitor your joint loans or loans where you are the guarantor regularly, since you are held equally liable for missed payments. Joint holder’s negligence could affect your ability to access credit/loan when you need it.

#3: Credit/Loan applications

Inquiries made by lenders because of an application you made for credit or loan can affect your score. Too many inquiries might mean that you’re taking on too much loan or that you’re in some kind of financial trouble and are looking for credit to help you out. Shopping around for the best deal in terms of best interest rate for home loan or a new auto loan shouldn’t cause a problem but always make sure that the lender knows you are asking only for a quote and not making an application for loan or credit. Checking your own credit report and credit score does not affect your score.

#4: CIR is an important financial tool; don’t ignore it

Get a copy of your CIR soon after you begin using credit & check your CIR annually or after opening new credit accounts. If there is any erroneous data in your CIR, get it corrected with the help of the lender and Credit Information Company (CIC). You must allow time for updates to be reported; creditors typically report updates to accounts once a month to CIC, after the end of a payment cycle.

Building and maintaining a good credit profile will enable you to access credit when you need it without much hassle. If your CIR shows that you repay credit on time, this will usually help you get credit. It may also help you get the best credit deals.
Our Experts

Sucheta Dalal Trustee - Moneylife Foundation

Abhay Datar Abhay Datar is a consumer activist and is also Member of the Managing Committee of Mumbai Grahak Panchayat (MGP). He was Treasurer at MGP for over two and a half years. After working at Bank of Baroda for about 29 years, he retired as IT Manager. After retirement, Mr Datar joined Consumer Guidance Cell of MGP in 2008 and solved many cases related to banking including online fraudulent transactions, misuse of credit cards and ATM cards. Also handled cases related to mobile and mediclaim. Mr Data

Suresh Prabhu Mr Prabhu retired as Senior Vice President from HDFC Bank

R Bhuvaneswari After serving Bank of Baroda for almost 40 years, Ms Bhuvaneshwari retired as Chief Manager in 2013.

Yogesh Sapkale Yogesh Sapkale is Deputy Editor of Moneylife and writes on finance, credit related issues

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