If an individual’s CIBIL score has been falling, they might have taken financial decisions that have dented their score. To fix that, he/she first needs to understand what has affected the score.

Credit score of an individual borrower shows his credit history. This includes the number of credit accounts an individual has, the total debt he has, his repayment history, and loan-seeking enquiries the borrower has made.

Lenders use this credit score to evaluate an individual’s repaying ability, depending on which his/her loan application is approved.

Dipika Jaikishan, Co-founder and COO of Basis, “One’s CIBIL score is like a financial report card of an adult and is a number between 300 and 900. This score is taken into account when one applies for loans or credit cards – and helps the lender make a decision about the borrower’s application.”

Having said that, a credit score above 700 is considered a good score. The chances of getting a loan or credit card increases, with a credit score of 750 and above. The borrower also gets attractive interest rates. If you have a low credit score, it can be difficult for you to find lenders.

Therefore, if you rank lower than that, how do you fix a score below 700?

Industry experts say, for individuals with a low credit score, if they are not borrowing at present, they should try to improve their credit scores. For instance, try to check your credit report at regular intervals, doing so will help you detect any errors, that can pull your credit score down.

Additionally, individuals with higher credit scores also need to take measures to maintain it.

Jaikishan says, “If an individual’s CIBIL score has been falling, they might have taken financial decisions that have dented their score. To fix that, he/she first needs to understand what has affected the score.”

Credit utilization ratio: If you have used more than 30 per cent of your credit card’s limit during a monthly cycle, then your credit score tends to fall. Experts say one should try and limit their credit usage for the upcoming months to see a recovery in the score.

Insufficient repayment: When you don’t pay your credit card bill or loan EMI in full, the remaining amount accrues, and your debt also increases. This causes an increase in the debt to income ratio, and your credit score drops. To avoid this, try to repay your loan amounts in full.

Missed or late payments: If you delay or default on your loan payments, it will likely impact your credit score. Jaikishan adds, “In case you’ve missed a recent payment, talk to your bank or provider to see if they can accommodate your payment without a penalty.”

Incorrect information on your credit report: At times, your credit report may contain errors and mistakes due to wrong or delayed reporting. Experts suggest one should check their credit report to see if anything is amiss, and aim to correct it as soon as possible.

Repeated applications with multiple lenders credit facilities: When you have multiple outstanding applications with various lenders/ banks, that too affects your score. Hence, try not to have too many outstanding loan applications.

Additionally, note that if you’re a guarantor for someone else’s loan, and they happen to have defaulted on their repayments, this will affect your credit score as well.