Before I discuss about improving credit score, lets know what it is?
What is credit score?
Credit score is a consolidated number given by Credit bureau(CIBIL in India) based on your loan and credits.A healthy credit score means you are often repay your loan and credit payments. Credit score is between 300-900.Anything over 800 points often gets their online loan approved. But this doesn’t have to hamper you in procuring an Affordable Personal Loan, because the credit history isn’t taken into account by some moneylenders when lending.
Why it should bother you?
- All banks and lenders query CIBIL to obtain your score for loan/credits
- A healthy credit score will fasten your loan process
- A bad credit score may lead rejection of your loan or reducing your credit limit
What steps I do take to improve my credit score?
- Obtain a credit card soon if you don’t have one.You can use it to spend now and pay later.It is a major way to improve credit score as banks often send all its related data to CIBIL regularly.
- Spend regularly on your credit card for your monthly expenses
- Always make your monthly payments on time, late payments or lapses indicates you are unable to manager your expenses
- always stay within your credit limit, for ex- if your credit limit is 35000, never go close to it.Using maximum credit limit indicates you are credit hungry and your income is not sufficient to manager your expenses
- A healthy credit score indicates your are financial secure and banks/lenders sees your loan favorably.
How to check your Credit score?
You can review your credit card regularly from CIBIL at a nominal cost of 470 INR.
Remember 80% of loan approved have score greater than 750.So check your credit score today.