One of the important factors which determine your eligibility to avail a loan is your credit score. The score measures your credibility and the probability of repayment of the loan. The higher the score the better are your chances of availing a loan at competitive interest rates.
Your credit score is comprised of various factors and it can increase or decrease depending on your credit behavior. If you want to build up your credit score and that too quickly, here are some tips on how you can do so –
Pay your dues on time
One of the primary components of the credit score is the repayment history of the credit which you have availed. That is why it is very important that you repay your dues in a timely manner. If you have a credit card, make sure to pay the complete bill within the payment due date. If, you have loans, pay the EMIs as and when they fall due. When your repayment history becomes clear, your score would increase fast.
Don’t avail too much credit
You are assigned a credit limit based on your financial capacity. The actual credit which you avail against the limit allowed determines your credit utilization ratio. If you avail limited credit, the ratio would be low. A low ratio is good for your credit score. If the ratio increases, your credit score would suffer. So, limit your credit usage.
Don’t make too many loan applications at once
Every time you make an application for availing any type of loan, there is a hard inquiry into your credit score. Each inquiry damages the score to some extent and if there are a lot of inquiries at once, the score suffers. So, if you want a loan, do thorough research and then apply for a loan with one lender only. Moreover, don’t avail too many loans within a short span of time so that your credit score is maintained.
Pay your utility bills on time
Many of you don’t know this but your utility bills like telephone bill, electricity bill, gas bill, etc. also affect your credit score. If you pay your bills on time, your credit score is improved. So, keep this point in mind and pay all your utility bills within the payment due date.
Build a credit history
You should have a history of loans and credit card debts if you want a good credit score. The score depends on your credit history too and if you don’t have any credit to your name, your score would be low. If you want to build your score quickly, avail some credit and pay it on time and your score would increase.
Check your report from time to time
The last tip is also an important one. You can increase your score when you know exactly where it stands. So, inquire about your credit score at regular intervals to keep it in check. An inquiry made by you would be a soft inquiry and would not affect the score. Instead, it would help you take the necessary steps to improve it. So, if you want to increase your credit score quickly, follow these tips and see your score grow in no time.
Every person in today’s time needs money to meet their financial requirements which they can lend from various banks or other lending agencies, but before granting the loan, the agencies first evaluate the borrower on multiple parameters of which Credit or CIBIL score is the most important one. CIBIL is the most favored credit rating agency in India which many lenders prefer for evaluating your creditworthiness. Good credit or CIBIL score is essential, and you can improve the score by keeping a check on a few things which includes the timely pay-off of your credit card balances, clearing off your EMIs timely.
It can be done by periodically evaluating your credit report and if you find any discrepancy then raising it over www.cibil.com. Your good debts present in your credit report also helps you to improve your CIBIL score. Also, take care of avoiding risks of low or no payment of your dues which could be any loan, EMI or even your phone or utility bills because the provider may anytime ask the credit agency to mark you defaulter which will lower down your credit score.
In case of your credit card do not overuse it and if the bank has increased your limits then use it wisely.However, if you have some joint financial account, then always keep a check over the payback of EMIs and loans as no-payment by the other person will also hamper your score. However, following some basic tips helps in improving CIBIL or credit score which ultimately not only helps you to get your funds but also to avail it at a reasonable interest rate.