A credit score is one of the most important factors which determine person eligibility for loan approval. It is a three digit number which ranges from 300 to 900. The more is your credit score the more are the chances to qualify easily for any kind of loan. But what if your number is less than 750? These days many people face this problem, but here are some simple ways with which one can easily increase their credit score.
Quick tips to increase your credit score
In our earlier blog, we told you various facts about credit score, how it is calculated and the benefits of a good credit score. A good credit score provides lots of benefits to a borrower such as low-interest rate, higher loan amount, quicker loan approval process and higher repayment period.
Also Read: All you need to know about credit score
But why should anyone face a problem because of the low CIBIL score? Continuing the series, today we will give you few important tips with the help of which one can help you increase your credit score. Let’s check:
Avoid High usage of credit card
The most important thing to keep in mind for increasing your credit score is to go for minimum credit card usage. Spend only when you can easily repay the bills. Because, if you have a high outstanding amount, it will instantly bring down your score. Keep only 1-2 credit cards with you and close the unused one by clearing their account. This will help in building good credit history over a time period.
Use credit card smartly
Avoid continuous using of credit card. It may not affect your credit score but if due to some problem, your outstanding amount increases or goes on the higher side, then it can negatively impact your CIBIL score. Use them smartly in order to avoid such implications.
Maintain EMI cycle
For any loan approval, banks check your previous history of repayment of loans and EMI payment history track record. Banks do not take this as an excuse when you are not able to pay your EMIs on time. So make a timetable for that.
Avoid paying jus the minimum amount
Many people think that by just paying the minimum amount they can save themselves from getting a negative CIBIL score. Because, when you just pay the minimum amount, finance charge still levy on you and rest of the bill remains the same. Also, always take care of any inaccuracies in your billing cycle, if there is any take a quick action on that.
Avoid taking unsecured loans
Credit institutions discourage such borrowers who always love to take loans for their personal work. Such unsecured loans are not only a headache but also lowers one’s credit score. It’s always better to take home loans, auto loans which are secured by assets. To increase credit score one must avail minimum credit and secured loans instead of personal or unsecured loans.
So with these simple and important tips, keep your credit score always high and enjoy all the benefits of a good score.