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9 Tips to Maintain a Healthy Experian Credit Score

Clix November 20, 2021

 

 

Your credit score is one of the most crucial factors that lenders consider to determine your creditworthiness. For instance, Clix Capital offers you a limited loan amount at appropriate interest rates based on your Experian credit score. The higher score you have, the higher the loan amount you may get at lower interest rates. However, many people might be living with a bad credit score due to a lack of awareness. They don’t know how to stay financially fit and maintain a healthy credit score. In this guide, you will find a few valuable tips that can help you maintain a healthy Experian credit score.

Importance of Having a High Credit Score

A bad credit score reduces an individual’s credibility to take a loan and brings them financial loss. People with high credit scores should also stay cautious by checking their credit report from time to time. Your credit score may fall if you continue making mistakes or take your credit score lightly. Having a high credit score is extremely significant to prove your credibility to your prospective lenders.

Experian is an Indian credit bureau that calculates your credit score based on your repayment history, credit length, diversity in your portfolio, and other factors. When you apply for a loan, lenders expect a high credit score that indicates your responsible credit behaviour. You may get faster approval for a higher loan amount at lower interest rates if you have a high credit score. That is why it is crucial to stay financially fit and maintain a high credit score.

Tips to Maintain Your Credit Score

Now that you realise the significance of maintaining a high credit score, these are a few tips that might be useful.

1.    Check Your Credit Report Regularly

This is the most crucial factor that affects your credit score. You must check your credit report regularly to identify any inaccuracies, misinformation, or errors. If you find any of these, raise a dispute with the credit bureau and get it resolved as soon as possible. Once they fix your issue, you may notice an improvement in your credit score immediately.

2.    Avoid Late Payments

Never delay payment for any type of loan EMIs or credit card bills. Missing or delaying these payments will directly affect your credit score. You may avoid late or missed payments by activating e-mandate for automatic payments from your bank account. You may also set up reminders or make a monthly task sheet to avoid missing or delaying payments.

3.    Diversify Your Credit Mix

A healthy mix of different credit types shows that you can handle credit responsibly. Therefore, try to diversify your credit mix with secured loans, unsecured loans, short-term loans, long-term loans, and other credit types.

4.    Avoid Frequent or Multiple Loan Enquiries

Avoid applying for multiple loans simultaneously, as it poses you as a credit-hungry borrower. Every time you enquire about a loan, it shows up in your credit report and reduces your credit report by a few points. Therefore, evaluate your needs, do some research, and compare lenders before applying for a loan for any purpose.

5.    Maintain a Low Credit Utilization Ratio

Keeping your credit utilisation ratio below 30-40% is crucial to maintain a high credit score. It is the percentage of your credit limit you use up on average. If you largely depend on credit to meet your everyday expenses, the lender may perceive you as a credit-hungry borrower and reject your loan application. A high credit utilisation ratio also reduces your credit score, which is another drawback for lenders while evaluating your loan application.

6.    Request an Increase in Your Credit Limit

If you find it hard to cover your regular expenses within the available credit limit, you may consider requesting an increase in your credit limit from your credit provider. However, remember that they will increase your credit limit only if you have been regular with your repayments. Also, ensure that you do not increase your expenses as well along with the credit limit.

7.    Retain Old Accounts

Closing your old accounts is never a good decision for your credit history. The older your account is, the longer your credit history it depicts, and the better it is for your credit score. While evaluating your loan application, lenders want to ensure that you have been managing credit responsibly for a long time, and an old account can help you prove that.

8.    Check Your Co-Signed Loans

It is crucial to check your co-signed loans. Even if you are not responsible for their repayment, your credit score may take a toll if the borrower is not paying its EMIs on time. Delayed or missed payments may reduce your credit score as well, along with the primary borrower’s. Therefore, if your credit score is reduced due to unknown reasons, keep a check on your co-signed loans.

9.    Take At Least One Loan

Individuals without any credit history find it hard to get a loan approval when they need it. Even if some lenders agree to lend you money, they may charge a higher interest rate than usual. Therefore, take at least one loan in your name and pay its EMIs on time from a young age. Over time, it will help you build your credit history and achieve the high credit score that most lenders look for.

These tips will not only help improve your Experian credit score but also stay financially fit. At Clix Capital, you can check credit score online and ensure that it meets your lender’s minimum requirement. We, at Clix Capital, also offer personal loans, home loans, and business loans to meet your diverse financial needs. Take advantage of our minimal documentation requirements and easy eligibility conditions to get the type of loan you want to cover your expenses.

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You can also reach out to us at hello@clix.capital or call us at 1800 200 9898

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