10 Ways to Improve Your Credit Score
Do you know that a healthy credit score help lenders to evaluate you as a qualifier for a loan, the interest rate at which you’ll be offered the loan or a high credit limit on your card? Maintaining good scores is no hard task, what is requires is the commitment to manage your credit and diligent financial planning.
Here are ten simple tips to improve your credit score which will certainly help in increasing your creditworthiness in the market.
1. Always Pay on Time
Paying your bills in a timely manner will help increase your credit scores. Pay all your outstanding dues in full; this will have a positive impact on your Credit Information Report (CIR) over a period of time.
2. Good History Counts
The long positive credit history with each creditor does even reward your credit score even if the account is inactive or unused. Do not opt to close the inactive accounts, instead, keep the accounts open to boost your credit scores.
3. Eliminate Any Discrepancy
Your credit report is a reflection of your credit score. It is advisable to check your credit report for any errors and rectify them on time. Just open www.cibil.com and fill the online application form to get the report. Ensure the data submitted by your lender is correct else get it rectified.
4. Setup Payment Reminders
Today all the banks or financial institutions send payment reminder as and when the payment due date approaches. You can also opt for enrolling in automatic payments to get the payments debited automatically from your account to reduce the chances of missing payments.
5. Don’t Declare Bankruptcy
In the case of serious financial problems, avoid filing for bankruptcy. Listing bankruptcy on your credit report can immediately drop your credit scores and it continues to plague your report for a good number of years.
6. Negotiate with Your Creditors
In difficult financial situations instead of skipping payments or defaulting loans, negotiate with your creditor for a solution which is acceptable within your financial means. Forcing creditor to turn your debt to a collection agency can have a long-term negative impact on your credit score.
7. Avoid Fresh Credit in Repair Mode
If you are in credit repair mode don’t apply for a fresh credit right away. The more the enquiries lenders put into the CIBIL the more it will hurt your score.
8. Maintain a Good Credit Mix
It is wise to have a decent mix of both secured loans(home loans) and unsecured loans (credit card).If your credit portfolio is more inclined towards unsecured loans then chances are there that lenders will view this negatively, affecting your credit score.
9. Use Your Credit Limit Wisely
Credit utilization is a key factor to improve your credit score. Thus keeping the utilization lower will help you achieve the healthy score. Do not exhaust your card to its full limit as it gives the impression that your life is dependent on credit even if you are paying your dues on time.
10. Consolidate Your Debts
If you find it difficult to maintain multiple debt accounts, it is always advisable to go for a single debt consolidation loan. In this way, it becomes easier to track the payments and hence fewer chances of missing the payment.
Using these simple tips you can certainly maintain a healthy credit score. The key to maintaining a good credit score here is consistency and responsibility along with active approach in improving it. So go get your credit report to live a financially healthy and wealthy life.
