Your credit score is a three-digit
number, which helps lenders in deciding whether to grant you a loan or a credit card. It shows
your creditworthiness and repayment capability, i.e. how likely you are to
repay a loan or credit card bills on time. The higher your credit score, the
better your chances of being approved. A credit score of 750 and above is
generally considered ideal for getting faster approvals.
But, if you do not have a
satisfactory credit score, here are some tips that can help improve it.
1.
Build a long credit age
If you have a credit card, it is a wise idea to use the same card for as long as you can. This helps build a strong credit history that could work in your favour. As long as you continue to pay your credit card bills on time, it can play a positive impact on your credit score. You can even install a specific credit card app to set reminders for payments.
If you have a credit card, it is a wise idea to use the same card for as long as you can. This helps build a strong credit history that could work in your favour. As long as you continue to pay your credit card bills on time, it can play a positive impact on your credit score. You can even install a specific credit card app to set reminders for payments.
2.
Pay your bills on time
It is crucial to pay all your outstanding loan payments and credit card bills on time. Besides, paying utility bills such as electricity and rent regularly can further improve the credit score. On the other hand, payment delays or defaults can decrease your credit score. An excellent way to ensure timely payments would be to give standing instructions to the bank to make automatic debits from your account towards these payments.
It is crucial to pay all your outstanding loan payments and credit card bills on time. Besides, paying utility bills such as electricity and rent regularly can further improve the credit score. On the other hand, payment delays or defaults can decrease your credit score. An excellent way to ensure timely payments would be to give standing instructions to the bank to make automatic debits from your account towards these payments.
3.
Use your credits wisely
One must be prudent not to exhaust the entire credit limit available on the card. Utilising maximum credit can negatively impact one’s credit score. Ideally, it can help to have a healthy credit utilisation ratio of up to 30%.
One must be prudent not to exhaust the entire credit limit available on the card. Utilising maximum credit can negatively impact one’s credit score. Ideally, it can help to have a healthy credit utilisation ratio of up to 30%.
4.
Avoid multiple loan
applications
With every loan application or enquiry to a different lender, a hard query is pulled on a credit report. This entry stays in the applicant’s credit report for as long as two years and can lower credit score considerably. It is best to maintain gaps between consecutive loan applications to avoid damage to one’s credit score.
With every loan application or enquiry to a different lender, a hard query is pulled on a credit report. This entry stays in the applicant’s credit report for as long as two years and can lower credit score considerably. It is best to maintain gaps between consecutive loan applications to avoid damage to one’s credit score.
5.
Maintain a mix of debt
Try to maintain a balance of secured as well as unsecured loans. Overdependence on unsecured loans alone can negatively impact the credit score. This can further affect the chances of obtaining a loan in the future. You can consolidate multiple loans into one to make it more affordable and get a better deal.
Try to maintain a balance of secured as well as unsecured loans. Overdependence on unsecured loans alone can negatively impact the credit score. This can further affect the chances of obtaining a loan in the future. You can consolidate multiple loans into one to make it more affordable and get a better deal.
6.
Check your credit report
for mistakes
It is a good idea to keep a check on the credit score and rectify any errors you may have observed. It can help to go through your credit score report periodically. To obtain your credit report, fill up a form on the official website of CIBIL. Submit necessary personal details such as name, contact number and address on the form. You may have to pay a nominal fee to receive your credit information report and CIBIL score.
It is a good idea to keep a check on the credit score and rectify any errors you may have observed. It can help to go through your credit score report periodically. To obtain your credit report, fill up a form on the official website of CIBIL. Submit necessary personal details such as name, contact number and address on the form. You may have to pay a nominal fee to receive your credit information report and CIBIL score.
If you do not wish to apply for an online credit card, a
good alternative is to apply for a personal loan. You can avail instant
personal loans by downloading Bajaj Finserv app. It offers high-value loans of up
to Rs.25 lakh with minimal documentation and speedy loan processing. With
instant approval, you can receive the money in your bank account on the same
day of the loan application. Besides, you can enjoy a flexible repayment tenor
and calculate your EMIs as per your financial budget.
