Building Your Credit Score
When looking for additional funds or credit, a lot of things depend on your credit score – right from what rate of interest you’d be offered on a loan to approval or rejection of a credit card application. While we all know how important a credit score is, it won’t be an exaggeration to say that your financial security depends on how strong your credit score is.
If you’re planning to apply for a personal loan or a home loan and find your credit score to be lower than required, there are ways to bring it up. As a first step, you need to access a detailed copy of your credit report to see what’s affecting your credit score and then work on the related factors.
Must Read : UNDERSTANDING CREDIT SCORE
How to Improve Your Credit Score Faster
It’s not possible to boost your credit score overnight but if you know what’s impacting your credit score negatively, you can take adequate steps to increase it in a short time period. We’ve compiled 5 tips and tricks to boost your credit score faster, especially if you’re planning to apply for a loan soon:
Clean up your credit report
Even a single error in your credit report can lead to a dip in the credit score and affect it negatively.
First, get a copy of your detailed credit report from any of the credit bureaus in India and read it thoroughly. Understanding the elements of your credit report is very important, as that will lead you to the errors and gaps in the report so that you can get them rectified.
This is one of the fastest and most effective ways to improve your credit score. You can check your credit report for errors like:
- Payment made on time but reported late in the credit report
- Old negative information that shouldn’t be there in the report
- Unpaid payments which have actually been made on time
When you dispute an error with the credit bureau, they generally have 30 days to respond.
If you can manage to make small payments, also called micropayments, throughout the month, this can have a great impact on your credit score. If you own a credit card, keep making smaller payments frequently to keep the balance down. This positively affects your credit utilization and brings up your credit score.
Increase your credit limit
Another way to go about giving your credit score a boost is to get your credit limit increased. You can increase your credit limit by requesting your bank/NBFC. The process is simple and can be done online. Having your credit limit increased will lower your credit utilization ratio while your balance will remain the same.
Keep Unused Credit Cards Going
One of the smartest moves to boost your credit score is to keep your unused credit cards running. If your unused and old credit cards are not attracting any fee in terms of annual payment, keep them running. Not closing your old credit cards lowers your credit utilization ratio and can play an important role in building a credible credit profile.
- Keep a Healthy Credit Mix
Having a mix of credit accounts – instalment accounts and revolving credit – helps in boosting your creditworthiness. If you have only one of loan account or a credit card running, try to opt for the other one too to have a mix of credit accounts in your profile. This helps in building a strong credit score by adding credibility through different forms of credit.
When you’re planning to apply for a personal loan, knowing your credit score is extremely important. If the points mentioned above piqued your interest in checking your credit score online, tap here.
You’ll receive a detailed credit report from us wherein you can check your credit score to know your personal loan eligibility.
Clix Capital brings you pre-qualified loan offers on personal loans, business loans, home loans. Pre-qualified loan offers help you save considerable time on loan approval process and makes it simpler too.