Tips to Improve Your Credit Score: The better your CIBIL score, the more easily the bank will be ready to give you a loan or credit card.
Credit Score: In this era of inflation, we need a loan or credit card for some reason or the other to fulfill our needs. However, whether it is to take a personal loan or home loan, car loan or credit card, for this your CIBIL score or credit score should be good. The higher your credit score, the better your financial condition is considered. However, many times we make such mistakes due to which the credit score gets spoiled or falls.
Here we will also tell you about the reasons due to which your credit score can be bad. Along with this, we have brought some easy tips for you with the help of which you can easily improve your credit score. Let’s know about…
The CIBIL score ranges between 300 and 900 points. It is updated according to your 24-month credit history. In which a score of 550 to 700 points is considered good. But a score between 700 and 900 points is considered very good. However, if your CIBIL score is 750 points or more, then it becomes very easy for you to get a loan or credit card. It can be understood like this that the better your CIBIL score, the more easily the bank will be ready to give you a loan or credit card.
These are the reasons why CIBIL score gets spoiled
- If you take a loan and do not repay it on time, your credit score can fall.
- Not paying the credit card bill on time affects your credit score.
- Not maintaining the minimum balance in your bank account also affects your credit score.
- When you apply for many new loans in a short period of time, it can reduce your CIBIL score.
If your credit score is bad, you may have to suffer many losses. People with bad credit scores have to pay higher interest rates on loans and credit cards. If your credit score is bad, you may have difficulty getting loans and credit cards. Even if you get a loan, the interest rates can be very high. This may make it difficult for you to get a loan for a house, car or other big purchase. Not only this, you may also be denied a loan.
How to improve credit score?
Here we are going to tell you some easy ways. With these easy tips, you can improve your credit score and strengthen your financial position. However, remember that credit score does not change overnight. It may take some time for you to see improvement in your score.
1. Pay the loan on time
This is the easiest way to improve your credit score. Pay your credit card bills, loans and all other debts on time. Even a slight delay can affect your score. So, without being careless, pay your loan EMI or credit card bill on time. The better your loan payment record, the better your credit score will be.
2. Keep your credit utilization rate low
The credit utilization rate is the amount you are using compared to the total credit limit available with your bank. Use less than 30% of your credit limit. For example, if your credit limit is Rs 10,000, you should not keep an outstanding of more than Rs 3,000.
3. Do not close old credit cards
Your credit history also affects your CIBIL score. Loan history is important for building a better CIBIL score. The older your credit history, the better your CIBIL score. So, if you have an old credit card account that you do not use, avoid closing it.
4. Apply for new loans wisely
When you apply for a new loan, your credit report is checked every time. This can lower your score slightly. So, avoid applying for different loans in a short period of time.
5. Check your credit report
Check your credit report every year to ensure that there are no errors in your credit report. If you find any discrepancy, get it fixed immediately.
You can check your credit score for free (CIBIL Score for free)
Mobile wallet app Paytm has launched the facility to check CIBIL score. Now users can see their credit report in detail. Through this, you will also be able to see the credit report of active credit card and loan account.
