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Credit score is very crucial as it helps to get credit facility like loans from bank. Credit score drops generally due to defaults, past poor performance, more unsecured loans as it is not backed by securities and fraudulent transactions. So, it is very important for every card holders to improve their CIBIL score.
Learn How To Improve Credit Score Immediately With These 10 Steps.
Step #1: Pay Credit Card Bills And Loans On Time
It is very important to pay your credit card bills on time to improve your Credit score. If you have took loans so make sure to repay it on time. In case you are like me who have habit of forgetting then you can put Automatic payment modes like ECS.
And if you are more comfortable with offline mode then go for PDC.
Step 2#: Diversified Your Loan Options
Keep your loan options diversified. Just don’t opt for traditional route. You can take loans on other securities like Mutual fund units, Fixed Deposits, etc. Yes, one can pledged their mutual fund units to take loans.
Bank can provide cash credit and overdraft loans. if one has a good Credit score. For Instance: If you did FD of Rs.10 lacs then you can get loan on up to 85% on that amount.
And in case of Equity Mutual Fund one can get loan on 50-60% of NAV. This is most unique way To Improve Credit Score.
Step #3: Check Credit Report Regularly
Sometimes even if you did all things correctly your Credit score drops. This cause due to inaccuracies in credit report.
So, make sure to check credit report frequently to avoid report inaccuracies.
Step #4: To Improve Credit Score Keep Your EMI Low
Let’s admit it, we all have desires to buy latest mobile phones and other accessories. But to brag about the latest phone one have bought. One’s need money to afford it. So to fulfill their desires most people buy stuff on EMI.
But it is not wise option to opt for EMI to buy not so important things if you want to improve your Credit score.
Step #5: Settle Your Disputes On Time
Settle down all your bank related or transaction disputes as early as possible. It is very important to have healthy relationship with your bank.
It will surely improve your credit score and helps you to maintain it.
Step #6: Keep your old Credit cards
Keep your old credit cards which have good payments history. It will lengthen your credit history. Don’t take too many credit cards.
3-4 cards are more than enough for an individual. As it will become easier for you to track them regularly. Good credit history to improve Credit score.
Step #7: Keep your Credit Utilization Ratio low
Don’t do Extravagant spending through your credit card often. It’s highly recommended to keep your Credit Utilization Ratio not more than 25%.
Step #8: Try to Avoid Joint loan
It is recommended to avoid joint loans. But if you are applying jointly for a loan, then make sure your loan partner is trustworthy to avoid your partner’s debt problem. If one of you do defaults, it will affect both of your Credit score.
Step #9: Always go for long tenor
As we already discussed that one should pay their EMI and loans on time. So, it is recommended to opt for longer Tenor if you are taking loans or buying something on EMI.
Longer tenor will help you to keep your EMI low.
Step #10: Avoid taking loans more often
Last, but not least, avoid taking too many loans at a time. One should opt for second loan only after repaying their first loan. See, I don’t want to be seen as bashing loans. But, it certainly has negative impact on your Credit score which one can’t ignore.
It’s not a good idea to take personal loan to buy things if one doesn’t have capacity to repay it on time. So take loans only when one has capacity to repay it.
What is Really A Good Credit Score?
CIBIL score ranges between 300-900. The score between 300-500 is considered as poor score. And score between 500-700 is considered as normal. While score between 700-900 is considered as good credit score. If you credit score is below 500 then you should immediately take all the necessary measures to improve Credit score.
It is important to maintain your Credit score at least above 700 to get credit facilities.
Anything I Missed?
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Or maybe you have a question.
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