If you are one of those struggling with your credit woes and look to get an instant resolution for your score, then understand it – there are zero quick fixes. Having a strong credit score requires both financial discipline and knowledge about different options available to improve it.
What is called a strong credit score?
A credit score is a 3-digit numerical expression, which ranges anywhere between 300 and 900. Closer is your credit score to 900, the better is your score.
A credit score of 750 & above is considered an ideal score for availing of a loan and different credit options at favourable terms. In case your credit score in India is less than the ideal limit, you require taking crucial measures for improving it.
You can avail your credit report to check your credit score from any of the 4 credit bureaus, namely – CIBIL, Experian, CRIF Highmark and Equifax. Out of all 4 bureaus, the CIBIL report is given the highest weightage from credit lenders and issuers.
A credit score check online can be conducted by visiting the CIBIL website. Note that once you are on the website of CIBIL, you need to go to the option to check your credit report, then click on the CIBIL score check online free option after all the important details are filled up.
Remember, you can avail yourself of 1 free credit report from CIBIL once a year. If you look to check more than once a year, then you will have to pay for your credit score check online on the CIBIL website. Alternatively, you can visit any financial marketplace online to avail of CIBIL score check online free report once every month with monthly updates.
So, the major & important question is, how can you ameliorate your score? Develop the below-listed habits that can improve your score.
Review your credit report for any accuracy
It is very pivotal to make sure that all the info on your report is accurate. Any discrepancy or mistake reflecting on your report can have a negative effect on your score. As mentioned above, in India, there are four credit bureaus that provide your score – CIBIL, Equifax, CRIF Highmark and Experian.
Careful evaluation of your credit report from all four credit agencies for accurate information is important. If you view any inaccurate data, outdated info, or missing info, you should instantly raise this dispute with the concerned lender and credit agency. This is the best you can do to get a quick credit score fix.
Set up payment reminders to repay your dues by the due date
Constantly repaying your bills on time can raise your credit score within some months. A late payment or any missed repayment can considerably have a negative impact on your score.
To make sure that you repay your dues by the due date, write the repayment deadlines for every bill in your calendar or planner and set reminders online. Also, you can consider enrolling for the auto payment option via a bank or lender to have your repayment directly debited from your savings bank account.
Fix your CUR (Credit Utilization Ratio)
In case your credit card account balances surpass 30 percent of your available credit limits each month, it is a red flag meaning your score is suffering.
Even if you repay your balances in full each month by the due date, it might mean irresponsible credit behaviour in your report because you get viewed as a credit hungry individual who holds the chances of defaulting in future.
Thus, it is best if you either ask your creditor to increase your credit limit on your credit card or apply for an additional credit card to enhance your overall credit limit.
Convert your high-interest loans into EMIs via debt consolidation
In case you are facing difficulties or problems in making timely repayments owing to the high-interest rate charged on credit options, this means you have the chance of defaulting in future in case any financial emergency comes up.
You must be prepared from before for such situations and hence choose to convert your multiple outstanding debts into EMIs by repaying them through a low-interest cost personal loan.
On opting for a personal loan, you also get the option to select your repayment schedule as per your repayment capacity to repay them in affordable EMIs. The benefit here in availing of a personal loan to repay your existing debts is that the finance charges charged on credit cards are more than 2 times than personal loan.
Repay your maxed-out credit cards first
When you use multiple credit cards, it is recommended to make repayments towards those credit cards that you may max out. The tactic here is to assist decrease your CUR and boosting your credit score.
Form a strong credit age
Good average credit age is having an age of over 5 years. The longer you have your positive credit history, the better it is for your score. In case your credit history is very short, there is not much that you can do.
You just need to be patient and not close your oldest accounts. If you have zero histories at all, it might take 3 to 6 months from the starting date to view any activity being addressed on your reports.
One option for establishing a good credit history is to avail a credit card and make small purchases that you can repay within time in full.
Maintain older credit cards, i.e., do not close the old ones
As mentioned above, your credit history age has a crucial impact on your score. It means you have experience in managing the credit. If you have any old credit cards, it is important that you keep them and continue repaying the bills on time every month in full. Avoid closing them even if you do not use them.
If you want to close any of your credit cards, choose to close the relatively newer ones. You are keeping your old cards often assists you to form along as well as healthy credit history, which improves your credit score.
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