Maintain Good Credit : 5 Tips To Boost Your Credit Score

Credit score plays a significant in availing loans. Your ability to repay future loans is determined by your credit score, which is provided to the lender. Your credit score is influenced by things like your payment history, balance due, credit portfolio age, and credit inquiries. A credit score, which consists of three digits and ranges from 300 to 900, demonstrates your creditworthiness. Your credit and repayment history, the specifics of which are disclosed by the lenders with several credit bureaus, form the basis of the score.

In this article we will discuss a few tips that can help you in boosting your credit score,

1. Make sure you clear the credit card dues on time

You can increase your credit score in a number of different ways. Maintaining discipline with your debt repayments is crucial. You can begin by analysing and determining the root cause of your poor credit score and then you start rectifying it by making the necessary corrections. In case you don’t know , your payment history is one of the key elements that determines your credit score. In order to raise your credit score, strive to pay off all of your current debts, including credit card and loan payments, on time.

2. Keep a watch on your credit card reports

Regularly check all of your credit reports. You will get a better sense of everything that is listed in your credit report as well as the loans and defaults that are lowering your credit score. The data that is recorded could occasionally be inaccurate. Even when you complete a loan or make a timely payment, your credit score may not always reflect it. If that happens, you can always make a complaint to the bank or the credit rating company.

3. Don’t be credit-hungry all the time,

Maintain a credit card utilisation rate of no more than 30% because anything more gives the impression that you might be overextending yourself. Additionally, avoid applying for a new loan if your credit score is poor because doing so may make you seem credit-hungry, which will lower your credit score.

4. Maintain the ideal debt-to-income ratio

Do not close your current credit cards since you might lose the associated credit limit and your credit score could suffer as a result. Continually monitor your debt-to-income ratio, which is the proportion between your income and debt. Pay off some of your debt to reduce the ratio if it is high.

5. Be patient while applying for loans

Do not instantly turn to another lender if your application for a loan or credit card at one lender has been denied. Your credit score will be checked once more by the new bank, who may decide to deny the loan. The best course of action Is to hold off on asking for a loan until the credit score has increased. Every application you make is noted in the report, which could have a negative effect on your credit score.