How to maintain and improve your Credit Score?

Want to improve your Credit Score?

Credit Score

Being a loan borrower, you know that lenders consider your income, CIBIL Score, and CIR (Credit Information Report) into account before granting any loan. These are the basic tools that are used to judge your loan application. Since the Credit Score gets derived from your CIR, it is very important for you to strengthen your credit history in order to experience instant loan approval. A person can improve your Credit Score by following simple steps:

Step 1: Pay your Monthly EMI’s and credit card dues on time. Late payments make a wrong and negative picture in front of lenders and in turn, your chance of getting loan rejection gets higher.

Step 2: The borrower must keep his balance low. If you make payments on time, your balance on loans will get reduced on time. You must be careful while making timely payments on your Credit Cards as well as while utilizing your credit card.

It is wise to use plastic money instantly. If you consistently make out your Credit Card limit and end up carrying an outstanding balance in your hands, it is a negative indicator for the lender indicating high debt on the consumer part.

Step 3: Maintain a healthy mix of Credit: The borrower’s credit history must be a blend of secured loans like Home Loan, Car loan, and Unsecured Loans like (Personal Loan, Credit Card), etc.

Step 4: Apply for a new Credit In Moderation: If the borrower has made many applications for loans or you have been recently sanctioned new credit facilities, the financial institution is likely to view your loan application with huge caution.

It will reflect your ‘Credit Hungry’ Behavior that shows your debt burden is likely to increase in the future.

Step 5: The borrower should monitor his co-signer, joint, and other guarantor accounts every month. In the case of a co-signer and jointly held accounts, a person is also held equally liable for any missing repayments.

It is very important as any negligence on the joint holder’s part can affect your ability to access credit when you need it.

Step 6: A person must review his credit score in history once a year.  It is essential to review your credit history three to four times a year.

Thus, it is very mandatory to keep this set of rules in mind for improving the credit score.

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