When it comes to securing loans, the amount matters – the loan size, to be precise.But here’s the catch: in today’s financial landscape, banks scrutinize the credit score – be it for personal loans or credit cards. Even if your credit score resembles a rollercoaster ride, fear not; there are savvy ways to nudge that number upward.
In the financial realm, credit is king, and credit rating agencies reign supreme. These entities are the gatekeepers determining your credit-worthiness, with a score of 700+ hailed as excellent. Anything less, and you’ll find yourself knocking on loan approval doors longer than desired.
Now, let’s talk about damage control and how to boost your credit score swiftly. Here are 7 smart tips that can help you improve your credit score:
1. Pay your dues on time
Missed an EMI or played hide-and-seek with your credit card payment? Time to get your act together. Set up reminders, be a credit ninja, and settle those outstanding debts promptly. Late payments not only dent your wallet with penalties but also take a toll on your credit score. Automate your bill payments, and voila, stress less about deadlines.
2. Less is more – especially with credit
Exercise prudence! Avoid drowning yourself in a sea of debt all at once. Don’t be the person juggling multiple loans simultaneously; it’s like waving a red flag screaming, “I can’t handle my finances!” Repay one loan before seeking another. This savvy move shields your credit score from taking a nosedive.
3. Balance is key – maintain a healthy mix of secured and unsecured loans
A combination of home and auto loans (secured) alongside personal loans and credit cards (unsecured) over varying tenors is the secret recipe for a robust credit score. Too much of one type might send the wrong signal.
4. Credit applications – apply within limits
Don’t be the person constantly clamoring for credit. Apply when necessary, not just when you fancy it. Remember, an excessive appetite for credit can be a blemish on your credit score.
5. Monitor joint accounts religiously
When you are partnering with someone on a financial venture, their missteps can become your headache. Regularly scrutinize co-signed, guaranteed, or joint accounts to ensure financial harmony and preserve your credit reputation.
6. Keep an eagle eye on your credit history
Mistakes happen, and credit agencies aren’t immune. Regularly review your credit score and report for any hiccups. If discrepancies rear their heads, squash them promptly. Your credit report is your financial resume – keep it impeccable.
7. Build your credit history judiciously
Debt isn’t inherently evil; it’s about making the right choices. Opt for longer tenors to ease EMI burdens, and consider boosting your credit limit. It’s not an invitation to splurge but a strategic move to keep your credit utilization in check, positively impacting your score.