Boosting Your Credit Card History is Not as Hard as You Imagine
According to a TransUnion Cibil survey, nearly 22 million customers in India seek credit each month. The credit score of the prospective borrower is one of the key parameters that lenders check before extending the loan. The score reflects the customer’s creditworthiness. The higher the credit score, the better the chances of obtaining a credit card/loan with a higher limit at a lower interest rate. Building a credit card history is a time-consuming operation.
Understanding the factors that contribute to your credit history will help you boost it. Make deliberate and corrective efforts to control your finances and increase your score.
How to Improve Your Credit Score?
Be Disciplined with Credit
Always pay the bills on time. Unpaid debt on your books harms your credit score. Be organized and make sure that all of your EMIs are paid on time. At the end of the billing period, you can pay off all of your debts; otherwise, you will be penalized in addition to having your credit score lowered.
Make it a habit to set reminders in advance to avoid last-minute problems. You may also register for an automated bill payment programme to prevent any failures in clearing bills.
Maintain Old Credit Cards
If you have had any credit card for a long time, you must keep them in good standing by paying your bills on time. This will aid in the creation of a long credit history, which will help to improve your credit score.
Avoid Taking Excessive Debt
Credit should be used sparingly. Refrain from taking on too much debt at once. The number of loans applied for in a given period should be held to a minimum. If you do not need a credit card do not apply for a credit card.
To save your credit score from plummeting, pay off one loan before taking out another. If you take out many loans at once, it will show that you are constantly in need of money. When you take out a loan and successfully repay it, your credit score will improve.
Maintain a Healthy Credit Mix
If you need funds, make sure you have a healthy mix of secured and unsecured credit. It will show that you are a responsible consumer and will help you secure a larger sum of credit in the future if you pay your debt on time.
Monitor Your Accounts Regularly
Monitor all your accounts on regular basis, including joint accounts. Any discrepancies in joint accounts would also have a negative impact on your credit score. As a result, take preventive measures to minimize any potential harm.
Check Your Credit Report for Any Mistake
Check your credit report at regular intervals for any errors or failures to update your recent records. If you find an error, please report it right away so that it can be corrected.
Select the Right EMI
If you require funds, always take a loan that you can repay on time and with no defaults. Use the money wisely and never skip an instalment. Moreover, choose the EMI that best fits your repayment ability.
Building credit history takes time. You can create a stable credit score over time by exercising prudent financial planning and adhering to the steps mentioned above.