How to Increase Credit Score to 800?
Whenever you apply for a loan or a credit card, your credit score is one of the most crucial figures that lending institutions check. That is because your CIBIL score is a three-digit number indicating your payment history, creditworthiness, and overall financial management. Based on this information, they determine your chances of loan approval, loan eligibility, and the likelihood of default.
If you are looking for a credit product, check your credit score and ensure it is good enough to fulfil the lender’s requirement. This article will teach you how to increase your CIBIL score to 800.
Why Having a Good Credit Score is Important?
A good CIBIL score helps you get the best loan deal at attractive interest rates and terms. Since the lender trusts high-score borrowers to make timely payments, they are more likely to grant higher credit limits or larger loan amounts at lower interest rates, with fewer additional charges, and budget-friendly EMIs. A score of 800 means you have an excellent credit history and enjoy better terms on loans and credit cards. Here is the CIBIL score range.
| CIBIL Score Range | Rating |
|---|---|
| 300 - 500 | Poor |
| 500 - 650 | Average |
| 650 - 750 | Good |
| 750 - 900 | Excellent |
Ways to Achieve Credit Score to 800
Here are a few tips on how to increase my credit score to 800.
1. Pay Your Bills on Time
The credit score is calculated largely based on your repayment history. Making timely payments for all loan EMIs and credit card bills is the best way to increase your CIBIL score and achieve an 800 CIBIL score. To maintain a consistent repayment history, activate the e-mandate to clear your recurring payments without overspending automatically before the due date.
2. Reduce Your Credit Card Balance
The outstanding balance on your credit card or loan primarily impacts your credit profile. The higher the balance, the lower your credit score. Clearing the credit card balance will boost your credit score by several points instantly.
3. Diversify Your Credit Mix
A diverse credit portfolio shows your skill in credit management and handling a mix of credit responsibly. Therefore, diversify your credit with different secured and unsecured loans and credit cards to improve your CIBIL score, build a good credit, and aim for a credit score above 800.
4. Lengthen Your Credit History
Building a credit history takes time. The longer you handle credit responsibly, the better the credit record you can build. Therefore, lengthen your credit history by taking credit early on and retaining old accounts.
5. Choose Longer Repayment Amount Tenure
Most lending institutions, including Hero FinCorp, offer flexible repayment terms, allowing you to choose a tenure with budget-friendly EMIs. If you aim to build a higher credit score, opt for a longer repayment tenure and pay your EMIs timely payments to maintain a good score and consistent financial management.
6. Minimise Inquiries for Hard Loans
Each loan or credit card enquiry you make pulls a hard enquiry on your credit report. Lending companies make this query to evaluate your credit behaviour and repayment capacity. Compare loan plans carefully and apply for credit wisely to minimise hard inquiries on your credit report. This simple strategy will save your score from dropping unnecessarily.
7. Monitor Your Previous Debts
Monitor your previous debts to check their outstanding dues and clear them as soon as possible. If you want to revise a repayment plan, opt for a balance transfer to make it more manageable.
8. Analyse Your Credit Score Report
Your score might seem low due to an error in your credit report. The document may have a wrong, double, or missed entry, possibly holding your credit score down. Request your credit report, analyse each entry carefully, and file a dispute if you spot an error. Resolving the mistake will instantly help you improve your score and increase CIBIL score to 800.
Advantages of Holding an 800 Credit Score
Now that you know how to get a CIBIL score above 800, let’s look into the advantages of having a high credit score.
| Advantages | Description |
|---|---|
| Lower Interest Rate on Loans | A high credit score indicates responsible credit behaviour and high repayment capacity. |
| Higher Approval Odds | Since you have handled credit responsibly in the past, lenders perceive minimum risk in approving your loan. |
| Faster Loan Approval | When you have a good CIBIL score of 800, lenders need to go through minimal verification procedures and additional formalities. |
| Higher Loan Amount | An 800 CIBIL score indicates high repayment capacity and minimal missed EMIs or loan default chances. |
| Best Loan Offers | Lending institutions feel safer lending to borrowers with high repayment capacity. |
| Better Repayment Plan | If you have a good CIBIL score, you can choose a repayment plan according to your financial capacity. |
How to Maintain Credit Score?
Once you achieve an 800 credit score, continue making your payments on time and retaining old accounts to maintain them. Moreover, keep your debt-to-income (DTI) ratio low and increase your credit limit to keep your credit utilisation ratio down. These are a few tricks to maintain your credit score at a high level.
- Pay Bills on Time: Late payments can significantly impact your credit score. Set up automatic payments or reminders to ensure bills are paid promptly.
- Keep Credit Utilization Low: Aim to use less than 30% of your available credit. High utilization suggests financial strain and can lower your score.
- Regularly Check Credit Reports: Monitor your credit reports for errors or suspicious activity. Report any inaccuracies immediately to the credit bureaus.
- Avoid Opening Unnecessary Accounts: Each new account can temporarily lower your score. Only open accounts when necessary and manage them responsibly.
- Build a Strong Credit History: Maintain old accounts in good standing to demonstrate a long history of responsible credit use, boosting your score over time.
Conclusion
Financial discipline, regular credit monitoring, and restrained credit card usage are the keys to improving and maintaining a good credit score. While lending institutions insist on a high credit score, Hero FinCorp uses a unique model to grant instant loans to individuals even with poor credit scores.
Frequently Asked Questions
1. How long until you can get an 800 credit score?
The time required to get an 800 CIBIL score depends on your current score and the strategies you use to improve it. It may take a few weeks to months to improve the score.
2. How is a Credit Score Calculated?
Credit bureaus calculate the credit score based on your repayment history, diversity in your credit portfolio, DTI and credit utilisation ratio, etc.
3. How often should I check my credit score?
Check your credit score at least once every six months to keep it in optimum condition and take prudent action when necessary.
4. Can errors on my credit report impact my score?
Your credit report may contain different types of errors that may impact your score. Identify the errors and report them to the credit bureau to improve the score quickly.
5. Do all lenders use the same credit score model?
Some lenders emphasise repayment history, while others check the DTI and credit utilisation ratio to gauge an applicant's loan eligibility.
6. What is a Consumer CIBIL Score?
A Consumer CIBIL Score is a three-digit number (300-900) representing an individual's creditworthiness based on their credit history. Higher scores indicate lower risk and better loan terms.
Disclaimer: The information provided is derived from conducted research. To enhance your CIBIL score, you must meet certain criteria. Please verify with official sources before taking any action.