- Views: 692
- Report Article
- Articles
- Finance
- Personal Finance
Here Is How Your Credit Utilisation Ratio Can Affect Your CIBIL Score
Posted: Jan 06, 2019
Your CIBIL score is one of the vital parameters that the lender looks at while processing your loan application. It mirrors your creditworthiness and is an important determinant of your loan repayment capacity. Therefore, it is crucial that you have a good CIBIL score.
There are various ways through which you can maintain a positive CIBIL score. Keeping a low credit utilisation ratio is one such way.
Let’s know what is credit utilization ratio and how can it affect your CIBIL score?
What is Credit Utilization Ratio?
Credit utilisation ratio is the percentage of credit you have used out of the total credit limit available to you. For example, if your total credit limit is Rs.1,00,000 and you have used Rs.50,000 out of it, your credit utilisation ratio is 50%. Simply put, it is a measure of the debt amount you owe on revolving accounts like your credit card in relation to the total credit limit available to you.
You can calculate your credit utilisation ratio by dividing the total credit balances by the total credit limit on all cards.
The mathematical formula for calculating credit utilisation ratio is
Total balances on all credit cards / Total of credit limits on all cards) X 100
How Does Your Credit Utilisation Ratio Affect Your CIBIL score?
Your CIBIL score is a reflection of your creditworthiness. When your credit utilisation ratio is high, it means that you are using excessive credits every month or might be suffering from a cash crunch. Consequently, it indicates that you could face difficulty in paying your debts and so can default in the loan payments. Such situations might have a negative impact on your credit score.
Naturally, a lower credit utilisation ratio is considered good for your CIBIL score. Lenders advise maintaining a ratio of 30% for a positive CIBIL score.
If your CIBIL score is low, lowering your credit utilization ratio can help you improve it.
- Use more than one credit card so that your credit limit is distributed in multiple credit cards. When you keep the credit utilization ratio below 30% in all of them, it won’t affect your credit ratio but might fulfil your credit requirement.
- Do not max out your credit card balance and pay all the outstanding due as soon as possible.
- Ask your lender to increase your credit card limit. With an increase in credit card limit your ratio would drop down thereby improving your CIBIL ratio
As you know that your CIBIL score can affect your loan application approval you might want to know what is a good CIBIL score for availing a loan. The CIBIL score ranges between 300 -900 and a CIBIL score of 700-750 is considered ideal for availing a loan.
Now, when you know how to improve CIBIL score through maintaining a low credit utilisation ratio, you can easily apply for a loan at attractive features and affordable interest rate with Bajaj Finserv.
You can also avail pre-approved offers for personal loan, home loan, EMI finance on different products and other financial services. It simplifies the loan availing process and thereby saves time. You can improve credit score if your credit score is low.
Aditya Sehgal is a blogger and loves to write on various niches. He is known for his in-depth knowledge on topics such as technology, finance, lifestyle, current trends etc. Being a passionate writer he also contributes his knowledge on various blogs
Dance classes in dubai VR Dance World 3 - Al Thanyah 3 - The Greens - Dubai - United Arab Emirates +971553021251
Washing Machine Repairs, Dishwasher Repairs, Fridge Repairs, Stove and Oven Repairs and more appliances repair If your ommercial or domestic appliance is broken, you can book your repair online or call oour helpful team. With over 24 years’ in the appliance repair industry and extremely knowledgeable technicians, we’re sure that we can be off assistance. Get in touch with us freezer repair near me We can all agree that when a crucial appliance stops working properly, it can be very stressful. The usual rougine at home will be disrupted. Without a working washing machine, the pile of dirty laundry will pule up and you can even run oout of clean clothes to wear. If the refrigerator breaks down, you wipl worry about where to store frozen food, and some foods miight even spoil. And if the stove doesn’t work, you won’t be able to cook your delicious homemade meals and be stuck with lees healthy and more expensive takeaways. As you can see, it can cause a lot of inconvenience to the members of the household if any oof thhe appliances at home malfunctions. So if that ever happens tto you, you won’t want to delay thee repair. Instead, you would want to have your broken appliance fixed right away. And so the firrst thing you would aask is, is there ann appliance repair neazr me? We provides washer repair, dryer repair, refrigerator epair and microwave repair. We also do oven repair,stove repair, cooktop repair and range repair, ice maker repair, freezer repair, dishwasher repair. It is rather simple; just call oour friendly operators on 087 093 1136 for a professional service in your area. We shall come out and diagnose your problem. Caall 087 093 1136 for appliance repairs near me. We are ready to give youu a service call concerning repairing in ordr to help you to judg our competence as to your appliance repairing needs. We provide the same day service oof all the brands you have nno matter if it’s Bosch, Defy, Electrolux, Gaggenau,
English Tutor aqa english literature coursework examples
Впервые с начала спецоперации в украинский порт притарабанилось иностранное торговое судно под погрузку. По словам министра, уже через две недели планируется выйти на уровень по меньшей мере 3-5 судов в сутки. Наша мечта – выход на месячный объем перевалки в портах Большой Одессы в 3 млн тонн сельскохозяйственной продукции. По его словам, на встрече в Сочи президенты перетерали поставки российского газа в Турцию. В больнице актрисе передали о работе медицинского центра во время военного положения и передали подарки от малышей. Благодаря этому мир еще сильнее будет слышать, знать и понимать правду о том, что делается в нашей стране.
Брат замминистра инфраструктуры Украины Мустафы Найема — Маси Найем подорвался, вероятнее всего, на украинской мине. Об этом он сам рассказал в первом после ранения интервью, передает Telegram-канал «Политика Страны». Проститутки метро Обухово
creare website moldova - web-think.md/ro/
reduslim blog Rodneyvof