It pays to have a good credit score. A high score can get you better and quicker loans. However, a low CIBIL score can be terrifying for those individuals who have an urgent need for money; this can affect their borrowings adversely.

 You can build up your credit score with these 10 smart moves. However, you need to practice these moves regularly and keep a tab on your Personal Loan EMIs and Credit Card monthly payments.

Benefits of a High Credit Score

Credit scores range from 300 to 850. Since it’s the highest credit score, 850 is considered a perfect score. An 850 credit score is difficult to achieve, but not impossible. And while it would feel pretty great to be able to say that you have a perfect credit score, you don’t need to achieve it to reap the benefits of a high credit score. These benefits include:

The reason higher scores come with these benefits is because a high credit score shows a lender that you’re good at handling your debt and are a responsible borrower. Lenders are able to offer better terms because you’re seen as less of a risk.

10 Ways to increase Credit Score

1. Check CIBIL Score Report at Regular Intervals

After availing the credit score report, check the number of open records there are against your name. In this segment, you may deal with two issues like the notice of records not opened by you, and the record has been shut by the bank. On the off chance that CIBIL has made a question, you can contact the loan specialist for finding the cure rapidly. Notwithstanding the specific situation, the report contains the record name, account type, account number, and possession data. The record subtleties are additionally referenced including credit limit, current equilibrium, endorsed sum, reimbursement residency, sum late, EMI sum, money breaking point, and installment recurrence.

2. Make On-Time Payments

Although it may seem obvious, on-time payments can significantly increase your credit score over time. Make it a habit to pay your bills on time. Try setting up auto pay if you’re prone to forgetting when bills are due!

3. Dispute Negative Marks

In the old days, you had to write letters to the credit bureaus if you wanted to dispute errors. Now services like Credit Karma let you dispute errors online. Start with derogatory marks like collection accounts and judgments. It’s not uncommon to have at least one collection account appear on your report. I had two from health care providers I used after having a heart attack; my insurance company kept claiming it had paid while the providers said it had not, and eventually the accounts ended up with a collection agency. Eventually I decided to pay the providers and argue with the insurance company later, but both collections wound up on my credit report. Fixing those problems was easy. I clicked the “Dispute” button, selected “The creditor agreed to remove my liability on this account,” and within a week the dispute was resolved and the entry was removed from my credit report. You can also dispute errors through each credit bureau. If that’s your preference, go here for TransUnion, here for Equifax, and here for Experian. Keep in mind some disputes will take longer than others. But that’s OK. Once you initiate a dispute, you’re done: The credit bureaus are required to investigate it and report the resolution. Spend as much time as it takes trying to have derogatory marks removed because they also weigh heavily on your overall score.

4. Pay down Balances

If you currently have credit cards and are using more than 30% of your limit then you want to follow this portion of this guide. Pay down high balances that put you over the 30% rule. Stay under 30% and maintain a low balance as mentioned previously. This factor alone is the second biggest impact to your score at a whopping 30% of your score.

5. Lower you’re Credit Utilization Rate

A high ratio of debt to credit can negatively affect your credit score. You can either pay off this debt or apply for a credit increase to reduce your utilization rate. Another way to do this is by paying your credit cards off early each month so that your posted balance is lower than your spending for the month.

6. Plan your Credit

Many people whose scores fall drastically are ones who do not plan their finances well. If you apply for too many credit cards just to increase your credit limit, but are unable to pay the bills off on time of all of them, then you will be left with a huge outstanding balance and history of delayed payments that will decrease your score by a lot. Also, applying for unplanned loans can leave you in a very bad financial state, if you are not able to repay them. Thus, it is important to plan credit and apply for a credit card/loan only if it is absolutely required and when you are sure that you will be able to repay the amount you borrow. Credit score cannot be repaired in a day or two. It requires time, patience and planning. Once your credit score improves, try to not make any mistakes that will harm it. If you do not have a credit score at all, then try to build it by applying for a regular or secured credit card.

7. Become an Authorized User

If you have a trusted family member with a good credit score, you have an opportunity to dramatically increase your credit score. You can become an authorized user of their account in order to boost your score.

However, this can be a taxing emotional burden. If you don’t repay your debts, then you could hurt their credit score. Talk through the pros and cons with your family member before trying this method.

8. Increase your Credit Card Limit

Higher credit scores are often due to maximum limits on credit cards, indicating that an individual is responsible enough to handle that specific amount. If you’re not confident in your ability to handle your finances just yet, avoid this route. You could end up in a worse place, and that added stress isn’t worth it.

9. Consolidate Your Debt

If you have trouble keeping track of multiple accounts, consolidating could be a good option. You can consolidate multiple debts into a single installment payment. In this case, you’ll be free of multiple payments to keep track of. Plus, you’ll be working towards a higher credit score. 

10. Prepayments

In past, you might have had prepaid loans. At that time, the thought of fixing credit score and bettering it must have also occurred. However, the early payments never repair credit score. The only thing you should keep in mind is to make timely payments for keeping up a steady history.

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