10 Guaranteed Ways to Increase Your Credit Score
While checking your credit worthiness, CIBIL score is one of the most important factors that lenders check. Credit scores range from 300 to 900 with 300 being the lowest and 900 being the highest. The score reflects your credit history, reflects your repayment behavior which helps the lenders to get a fair idea to decide on the status of your application. A low credit score is a sign of poor financial behavior that can lead to the rejection or approval of a loan at a lower interest rate. To be able to get quick access to funds, it is essential to have a good credit score. Read this article to know how you increase your CIBIL score
Tips To Improve Credit Score
Pay your loan EMIs on time
If you have taken a loan, secured or unsecured, make sure that you do not miss any EMI payment as it can hurt your credit score, making it more difficult for you It is difficult to take loans in future. If you are unable to pay your loan EMI, it is best that you approach a lender to restructure your EMI and pay off the loan.
Don’t make too many credit applications
If your credit card or personal loan application is rejected, remember that the same will be recorded in your credit report. So if you go to another lender and apply, they may reject your loan application on the basis of a low score. So, the best thing you can do is wait and reapply after a period of 2-3 months.
Pay your credit card bills on time
Paying credit card bills on time is a sign of good credit behavior and helps you improve your score. Make sure you don’t just pay the minimum amount due and pay the full amount due.
Avoid taking on too many loans at a time
The number of loans you hold has a great impact on your credit score. Taking multiple loans shows that you are unable to manage your finances and further lowers the score. On the other hand, if you are able to pay the loan EMIs on time, it can boost your score.
Monitor your credit utilization ratio
Using a credit card to make purchases can help you earn cashback and win reward points, but it is essential that you keep credit utilization within only 30% of your credit limit. Keep it. Doing so can improve your credit score and assure lenders that you are not dependent on credit cards to make purchases.
Make sure you maintain a mixed choice of credit
There are two types of loans that you can choose from, secured and unsecured loans. Taking too many unsecured loans can have a negative impact on your score, while opting for secured loans like home or car loans can really help you increase your score.
Check for errors in your credit report
It is important to note that your financial transactions may not be the only reason for a low credit score. Your credit report may contain errors, which is why it is important that you check the same regularly. Note down the incorrect information furnished in your credit report and report it to the CIBIL authority to rectify the errors and update the report with the correct details.
Opt for a longer tenure loan
While availing the loan, opt for a higher repayment tenure, as it will ensure that you get minimum EMIs to pay every month and you are comfortable making timely payments. Your credit score gets better if you don’t delay, default, or skip your EMI payments.
Avoid credit card closure
The age of your credit history matters. If you have an old credit card for which you have maintained good credit behavior, avoid closing the credit card. Remember, the longer the credit history, the better your credit score which indirectly increases your chances of getting a loan or credit card application approved.
Set payment reminders
Schedule your EMI dates and credit card payment dates in your calendar to make equal payments on time and avoid making any defaults. Regularization of your payments will help you improve your CIBIL score.
Monitor your guarantor, co-signed and joint accounts
If the primary account holder defaults on his loan, you will be held equally responsible for paying the dues. Your joint account holder’s negligence can affect your credit score, and you won’t be allowed it when you need it. Also, you will have to pay the dues if the primary account holder is unable to do so. Therefore, it is best to avoid becoming a co-signer, guarantor or joint account holder for any type of loan or credit card.
Increase your credit card limit
This does not mean that increased credit card limit increases your spending cycle. The trick here is that it can help you improve your CIBIL score. Raising your credit limit will help you keep your usage down as you leave a positive impact on your score by doing so.
You can improve your credit score by following the above tips. However, it is important to note that your score cannot be improved overnight and it will take you around 3-6 months to practice good financial behavior. By working towards improving your credit score, you open up a whole new world of opportunities for yourself as it helps you get quick access to credit card funds, quick loan approvals, low-interest rates and high loan amounts. is.
