How Long it takes To Improve Credit Score

We have all wondered whether buying that coveted bike or going on that much awaited vacation would be a wise decision or not, keeping our expenses and financial capacity in consideration. What a lot of people do is opt for a personal loan to fulfill all the goals. What this entails is we get a chance to walk upon the path chosen by us without putting a lot of pressure on our finances. But one can only avail a personal loan if they have a thriving credit score that is a testament of their creditworthiness and financial goodwill. 

Also Read: Test Your Financial Fitness

If one is planning to avail a loan from Airtel Finance then here’s how one can do it:

We need to download the Airtel Thanks App and go over to the Airtel Finance section. 

We need to then select the type of loan we need and fill in all the information – amount, tenure and other important details. Once the profile and the credit score gets verified, we need to fill the KYC application and wait for the loan disbursal for the next 24 hours. 

But how does one build credibility through their CIBIL/credit score? Read on to find out. 

What Factors Influence Your Credit Score?

Our credit score is like a ledger that keeps track of our loan and credit card repayment history. It notes down how many loans we have repaid successfully, what the tenures were and how much was the interest rate for each loan disbursed by the lenders. 

Our credit score helps lenders understand these aspects in a better way so that the loan can be disbursed as soon as possible. It is like an unspoken trust put against our finance management skills and discipline. Here are some factors that influence our credit score: 

• Our Payment/Repayment History: Our repayment history is one of the most crucial factors that helps our CIBIL score flourish. It is important that we do all the payments on time and without missing any EMIs. This proves that we are capable of repaying big loan amounts and increases our credibility. 
• Amount Borrowed: The amount we have borrowed for a personal loan or any fund determines the tenure of the loan and adds to our credit history. 
• Length of Credit History: The longer the duration of loan equals to a higher credit score because it tells the lenders that we can handle big amounts for longer periods of time. 
• Credit Mix: What kind of credit funds have been availed by us  – whether it is a personal loan, a credit card or house/car loan, can have a huge impact on our credit history. It shows versatility and a good capacity of repaying all kinds of funds. 

Also Read: What is Buy Now, Pay Later? How does this scheme work?

Estimating the Time to Improve Your Credit Score:

There’s no definite answer or formula to the question of “CIBIL score increase time”. The time it takes to improve our credit score depends on a variety of factors, such as our current score, our credit history, and the steps we’re taking to improve it. Generally, it can take anywhere from a few months to several years to significantly improve our credit score. However, with the right approach, it’s possible to see an improvement in as little as 30 days. 

Steps to Improve Your Credit Score Quickly:

If we’re wondering how to raise our credit score in a couple of months, here are a few steps we can take:

1. Pay Bills on Time: Consistently paying bills on time can significantly impact our credit score. This is because ‘payment history’ is one of the key factors that credit bureaus consider when calculating our score.
2. Reduce Credit Card Balances: High credit card balances can hurt our credit score. Try to keep the balance on each card below 30% of the credit limit.
3. Check for Errors on Credit Report: Sometimes, errors on our credit report can drag down our score. Regularly checking and disputing any errors can lead to quick improvements.
4. Limit New Credit Applications: Each time we apply for credit, it results in a ‘hard inquiry’ on our credit report, which can temporarily lower our score. Limiting new credit applications can prevent unnecessary dips in our score.

Also Read: What is Personal Loan Refinancing?

In conclusion, improving our credit score is a journey that requires consistent effort. While there are ways to see quick improvements, it’s essential to maintain good credit habits for long-term success.