7 Quick Tips to Increase You Credit Score - An Infographic
Credit score, a three-digit number that evaluates an individual’s creditworthiness, is an important aspect of financial profile. It is used to determine some of the most important financial factors in life, such as whether you’ll be able to finance a vehicle, qualify for a home loan or even get a credit card. A good credit score ensures easier approvals on loan, better interest rates, bigger credit limits in credit cards and many more such advantages that will not only give you an enhanced financial life but also a better lifestyle.
A good credit score ranges from 700 to 900 when you have streamlined finance with timely payments and repayments and any score below 500 is considered as a bad credit score which usually is an outcome of undisciplined financial behaviour. Following are just some of the key ways to ensure you keep your credit score, well above average
- Look at your Credit Report:Checking your credit score regularly is a good and harmless practice. It helps you keep a check on your financial health and accordingly devise adequate measures to rectify it. You can check your Credit score for FREE and obtain a detailed report from any of the four RBI approved credit bureaus in India. There’s no limit to the number of times you can check as this is a soft enquiry and does not affect your Credit score.
- Limit your inquiries: It could happen that you apply for a loan at a bank, but it gets rejected owing to a low credit score. In such case, do not hasten to re-apply with another bank as they would be able to see your rejection by the previous bank. This could further hurt your credit score & make things worse. Apply for credit only when it is necessary.
- Pay your EMI’s and dues on time: If you took a loan or a credit card, repaying when EMI’s become due helps build your credit score.
- No debt means no credit score: if you have no credit history – never used a credit card, haven’t had a car loan, never paid an EMI — you are what the credit bureaus refer to as “credit invisible”. In such cases, started building your credit by obtaining a credit card with a small limit and paying its dues on time.
- Don’t be a credit junkie: Use your Credit Card, though control your spends. Just getting the credit card will not get you good credit score. Try spending only up to 40% of your credit limit to keep the balance low. This will also help you repay the full amount on the due date.
- Fix accuracies: When pulling a credit report, conduct a thorough of the report. There might be red flags that don’t rightfully belong to you. In case of errors, the first step is to notify the credit bureau of the mistake, mention Report ID, highlight issues and get them fixed.
- Think like a bank: Keep a track of your credit score regularly. Don’t lose the good credit score you have worked for!
Original Source: Business Standard