One of the crucial indicators of your financial health is your credit score. It provides lenders a quick overview about your financial credibility and your credit usage behaviour. Your chances of getting authorised for new loans or lines of credit will increase as your score rises. Additionally, a higher credit score can help you avail loans at lowest interest rates in the future.
Here are 8 advanced ways that can help you in maintaining a good credit score,
1. Settle your credit card dues on time
If you have the means to do so, you should pay more than the bare minimum each month. Because it helps to keep your credit utilisation rate low, making progress on your outstanding debt can have a significant effect on your credit score. It’s best if you can clear off your monthly balance as quickly as possible. Additionally, you can pay off your balance in numerous instalments throughout the course of the month to keep it low and make it simpler to keep track of your spending. And while paying off even a percentage of your debt is beneficial, doing it in full will have the largest and leading impact on your credit score.
2. Choose automatic monthly payments
Among the most crucial elements in calculating your credit ratings is your payment history, and a long track record of on-time payments will help you attain good credit scores. To do this, you must watch that you don’t miss any loan or credit card payments by more than 29 days; payments that are at least 30 days overdue can lower your credit scores.
3. Keep a check on your credit card report
It is a smart option to routinely check your credit reports as they will reveal two details that are vitally essential to your credit score. The first is a credit card or loan in which you have made late or defaulted payments, which have impacted your credit. The information that is listed in the credit report is the second item it will reveal to you. This aids in improving the credit score because you can always contact the bank and CIBIL to have the problem fixed if you discover that there is bad information, such as defaults or payment delays, included on the report.
4. Correct the errors Instantly
Any errors must be immediately challenged by visiting the official website, www.CIBIL.com. After reviewing your CIBIL report, you can decide which transaction is incorrect or with which you disagree. Within 30 days, you must respond to the disputes and make the necessary corrections.
5. Keep a check on your Credit Utilization Ratio
Make doubly sure not to complete each purchase with your credit card. Maintain a maximum credit utilisation rate of 30%. By doing so, there are high chances that you will raise your CIBIL score.
6. Consolidate your existing loans
Take the initiative to start being on time with your payments if there are any loans for which you have been paying late. You can ask your bank to assist you restructure your debt if you are having trouble making ends meet with your existing EMI payments.
7. Don’t over borrow
If you apply for too many loans or regularly use your credit card close to its maximum, this can reflect poorly on your credit because it will appear that you are credit-hungry. The best thing to do is to stay within your credit card limitations and to avoid taking money except when it is strictly necessary.
8. Don’t repeatedly apply for loans
Your credit report will contain information on any loan or credit card applications you have made and were denied. If you immediately apply to another bank, they may reject your application if they see your poor score and the previous rejection. The best course of action in these situations is to refrain from applying once more and allow for the score to rise.