In the world of finance, credit score has its own significance. It is the parameter that lenders check while processing your application for loans such as personal loans.
Anyone with a credit score of 750 and more can get the loan approval at a lower rate.
However, in case if you wanted to apply for a personal loan and have a poor credit score, then you can incorporate some tips and improve it.
Let’s know 5 of those handy tips to increase your cibil score and be loan ready in this short post!
Pay your bills on time, every time
Your credit score gets hampered by the way you handle your repayments. Yes, if you pay your EMIs for ongoing loans and credit cards, then it can increase your cibil score. Thus, come what may; make sure to pay your bills on time and without defaults.
2. Check your credit report
Sometimes, your credit report may have some errors and incorrect financial entries that you may not have done. Hence, you must check your credit report from time to time and get it resolved. Once done, it can lead to an increase in your cibil score.
3. Manage credit utilization
If you use a credit card, then you should ensure to keep the credit utilization below 30%. If you won’t, then it may be assumed that you are dependent on your credit card for expenses and don’t have much income. Thus, it may affect your cibil score negatively.
4. Don’t remove old accounts
Many people have this habit of getting rid of older accounts with a negative history of the credit report. They do it to make it appear good. But it is not a smart move. Getting such reports removed may also mean getting rid of accounts with a good repayment history. You should maintain it as it may boost your credit score and prove your creditworthiness.
5. Avoid taking too many unsecured credits
If you can avoid taking too many unsecured credits, then it may help you increase your cibil score. Yes, you can do that by managing a mix of secured and unsecured loans.
What are you waiting for? Implement these 5 proven ways and see your credit score improving soon!