If you have a poor credit score, it takes a little bit of time and effort to improve it. The advantage of having an excellent credit score is that you will qualify for loans with lower interest rates and credit cards with premium rewards. The first step in improving your credit rating is checking and finding out as to what your current score is. Once you have a clear idea as regards the extent to which you have to improve your CIBIL score, you can make use of the following tips to achieve the desired result:
Pay All Your Bills On Time
Payment history is one of the key factors that affect your credit score. So, it pays to make monthly loan repayments on the scheduled date itself. This tells your lenders that you are responsible when it comes to credit. Your credit score actually reflects your ability to effectively repay debts.
Monitor Your Credit Utilization Rate
You must ensure that you are not utilizing too much of the available credit. This is because it indicates risk. The higher the credit utilization ratio, the higher will be the impact on your credit score. Try to limit your utilization to a maximum of 60 percent of the credit limit.
Make Sure Dues Are Paid In Full
Your bill will show both the total and minimum amount due. As much as possible try and pay off the entire amount. The more the revolving credit, the worse it will be for your credit or CIBIL score. Further, the bank will charge interest on the outstanding balance. So, paying dues in full always improves your score.
Manage Credit Cards Well
It is not a good idea to have too many credit cards in your name. It simply indicates that you are a credit hungry person. This will definitely have an impact on your credit score. When you have more cards, the chances of you having increased credit card debt are higher. Ideally, you should have 2 or 3 credit cards so that you can manage them well.
Avoid Making Too Many Loan Enquiries
Making too many loan or credit card enquiries in a short duration of time has an adverse effect on your credit score. It often contributes to reducing your credit score. Also, avoid checking your score too frequently.
Never Opt for Debt Settlement
If you think that debt settlement is the quickest and easiest way options get out of the debt trap, it is not true. It could actually work against you. Opting for debt settlement often creates a wrong impression. It is construed as your inability to repay debt. In addition to harming your score, it also reduces your chances of availing loans or credit cards in the future.
Good credit score often opens up opportunities for you. It helps you to qualify for loans with lower interest rates. If you have a good CIBIL score and are looking for a loan, we at Finwizz can help you. We offer loan solutions that suit your specific needs.