If your credit score has deteriorated, there is no need to worry, you can improve it again. Know how to repair a damaged credit card.
Whenever you take a loan, banks first check your credibility through your credit score. Your credit score is like your report card, which tells you how your repayment history has been in previous loans. If your credit score deteriorates, it becomes very difficult for you to get a loan from the bank and even if you get it, the interest rates are very high.
Generally, credit score gets spoiled due to our mistakes like not paying EMI on time after taking loan, not settling loan, not paying credit card on time etc. CIBIL score gets spoiled. But if you understand these 5 things well and correct your mistakes, then you can improve your deteriorated credit score again.
Pay installments on time
If you have taken a loan from the bank, then you should pay its EMI on time. If you are even a little careless in the matter of repayment, it directly impacts your credit score. Therefore, do not be careless in paying the installment. If you have missed any installment, compensate it and keep paying the further installments on time. This will start improving your credit score in no time.
Control credit card spending
Credit card is for your convenience, but it does not mean that you should keep spending any amount on it nor should you increase the credit card limit again and again. If you use your credit card more than 30 percent every day and repeatedly increase its limit, then the bank feels that your expenses are excessive and your dependence on the credit card is very high. Its effect becomes visible on your credit score. Therefore, everyone should use only 30 percent of the credit card limit. Even if in any situation you have to make a big purchase through credit card, it should be paid before the end of the billing cycle.
It is not right to take multiple loans simultaneously
Taking multiple loans simultaneously can also affect your CIBIL score. The reason for this is that by taking multiple loans together, the EMI burden increases significantly. In such situations, there is often a risk of missing the EMI. In this situation your CIBIL score may also get disturbed. Therefore, one should avoid taking many loans at once.
Do these things after loan settlement
Try that the issue of loan settlement does not arise and even if you are doing loan settlement, then definitely get it closed later. In fact, loan settlement is also mentioned in your credit history. When you settle the loan, ‘settled’ is written in your loan account. This means that you have not repaid the stipulated amount while taking the loan. Due to this the credit score gets spoiled. Therefore, when you become financially capable, you should go to the bank and say that you want to return whatever exemption you got in the dues i.e. principal, interest, penalty and other charges. After making all these payments, the bank will close your loan completely and you will be given a certificate of no due payment from the bank.
Think carefully before becoming a loan guarantor
Think carefully before becoming someone’s loan guarantor because if the loan taker does not repay the loan on time or does not pay the installments on time, then you too will have to suffer the consequences and this can damage your credit score. Therefore, even if someone has become a guarantor, then keep an eye on whether the borrower is paying the installments on time or not.
