If you have earlier applied for a personal loan and any other loan, then you may have an idea about the importance of the Credit Score. Lenders see your CIBIL Score as the first parameter while sanctioning your quick personal loan request at a lower rate.
If you have managed to pay your credit card outstanding and other debts on time, then you may have a robust Credit Score. On the other hand, loan seekers with poor repayment history and EMI bounces may have a lower Credit Score.
Hence, if you have a poor CIBIL Score, then you can easily improve your Credit Score by following some tips. You can go through this quick article to help you out. Read on!
- Be disciplined with credit by setting reminders for payment
Your repayment and the outstanding debt may affect your Credit Score. Hence, you need to maintain discipline when it comes to paying EMIs. When you don’t pay your EMIs on time, it not only forces you to pay the penalty, but even affects CIBIL Score. Hence, if you think that you are forgetting to pay it each month; you can set reminders for EMI payments. In turn, it will help you improve your Credit Score.
- Make sure to maintain older credit cards
Another trick that can help you improve your Credit Score is to maintain your older credit cards as long as you can pay the bill in full and on time. It will assist you in building a lengthy and strong credit history leading to an improvement in the CIBIL Score.
- Manage your credit limit
Make it a point to never exceed your credit limit by more than 30-40% on your credit card. It is because a higher utilization of credit on your credit card may affect your CIBIL Score. Even if you need to use a higher credit limit, you should ensure to readjust it sooner. If you have a higher usage limit on your credit card, then you can get in touch with your lender to get it customized as per your preferences.
- Go for a long tenor while availing a loan
When opting for a loan, you should select a longer repayment period. It will make sure that your EMI is lower and you can easily make repayments on time. When you keep paying EMIs on time, it will help you improve your Credit Score easily.
- Don’t ask for too much debt at a time
The number of debts that you indulge in should be minimal in a fixed time. You should repay one loan and then move to another. It can help you keep your Credit Score from crashing. Taking too many loans at a time will show that you are credit hungry and rely on debts when you don’t have funds. It will lead to the lowering of the Credit Score. On the other hand, availing a personal loan, home loan and more and repaying it in its tenor will improve your Credit Score.
- Check your CIBIL Score for inaccuracies
In some cases, CIBIL may make mistakes in updating your records, and it may hamper your Credit Score. Thus, it is better to check your Credit Score from time to time and resolve all issues. It will help you to maintain and improve your Credit Score.
Some of the easiest ways to improve your Credit Score are now discussed. If you are ready to avail a loan and have a poor score, then you can follow these tips.
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