When it comes to securing a loan, the amount matters – the size of the loan to be precise. But here’s the problem: In today’s financial landscape, banks check credit scores – be it a personal loan or a credit card. Even if your credit score seems like a rollercoaster ride, don’t fear; There are some smart ways to nudge that number upward.
In the financial sector, credit is king, and credit rating agencies reign supreme. These institutions are the gatekeepers determining your credit-worthiness, with a score of 700+ considered excellent. Anything less than that, 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 fast. Here are 7 smart tips that can help you improve your credit score:
1. Pay your dues on time
Have you missed your EMI or played a game of hide and seek with credit card payments? It’s time to get our act together. Set reminders, become a credit ninja, and settle those outstanding debts instantly. Late payment not only puts a penalty on your wallet but also impacts your credit score. Automate your bill payments and voila, the stress about deadlines will go away.
2. Less is more – especially with credit
Use discretion! Avoid drowning yourself in a sea of debt all together. Don’t be the person juggling multiple debts at once; It’s like waving a red flag and yelling, “I can’t handle my finances!” Repay one loan before asking for another loan. This wise step prevents your credit score from declining.
3. Balance is key – Maintain a healthy mix of secured and unsecured loans
A combination of home and auto loans (secured) with personal loans and credit cards (unsecured) of different tenures is the secret recipe to a strong credit score. Too much of one type may send the wrong signals.
4. Credit Application – Apply within limits
Don’t be the one constantly yelling for credit. Apply when necessary, not just when you feel like it. Remember, excessive hunger for credit can be a blemish on your credit score.
5. Monitor joint accounts religiously
When you are partnering with someone in a financial venture, their mistakes can become a headache for you. Regularly check co-signed, guaranteed or joint accounts to ensure financial harmony and maintain your credit reputation.
6. Keep a close eye on your credit history
Mistakes happen, and credit agencies are not immune. Review your credit score regularly and report any hiccups. If inconsistencies rear their heads, crush them immediately. Your credit report is your financial resume – keep it impeccable.
7. Build your credit history wisely
Debt is not inherently bad; It’s about making the right choice. To reduce the EMI burden, opt for a longer tenure and consider increasing your credit limit. This is not an invitation to wasteful spending, but a strategic move to keep your credit utilization under control and have a positive impact on your score.
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