Know 5 key tips and tricks to improve your Credit Score with minimal effort

Credit score is a three-digit number between 300 and 900 that indicates your creditworthiness as mentioned. A high credit score can help you get a new credit card or loan with ease, while a low credit sco

Disclaimer:

In Unit Linked Policies, the investment Risk in the investment portfolio is borne by the policyholder.

^*Disclaimer :

Max Life Smart Secure Plus Plan. A non-linked non-participating individual pure risk premium life insurance plan| The premium calculated as per Standard premium for 30 year old healthy male, non-smoker, 40 years policy term, 40 years premium payment term (exclusive of GST) for Max Life Smart Secure Plus Plan and is rounded off from Rs. 3,27,782. ^~1Condition for special exit value: Option to receive all premiums paid back at the age of 55 years and the life cover also gets terminated. Total premiums paid towards the policy (excl. GST) will be the Special Exit Value payable at the age of 55 years in case the policy holder wishes to completely exit the policy. Benefit available with special exit value -Total premium paid inclusive of any extra premium but exclusive of all applicable taxes, cesses or levies & modal extra. The total premiums paid plus underwriting extra premiums paid plus loadings for modal premiums exclusive of all applicable taxes, cesses or levies. This value shall be applicable on the base cover premium only and not to additional optional benefits like ACI, Accident cover, Joint life cover and Voluntary Sum Assured Top-Up.

Written by

Reviewed by

5 Easy Ways to Improve Your Credit Score

Your credit score is calculated based on your credit history. So if you have not been judicious with your credit cards or loans in the past, you will have a low credit score. If you have a low credit score, taking the following steps will improve your credit score over time.

1. Pay Your Dues on Time

The very first thing you should know when wondering about how to increase credit score is to pay your credit card bills and loan EMIs on time. If you keep skipping payments or pay your bills late repeatedly, it will lower your score. This also indicates your inability to handle your finances well. If you make a habit of paying your dues on time, it will play a significant role in improving your credit score.

2. Avoid Taking Multiple Loans

Are you someone who believes in taking a loan every time you get broke? If the answer is yes, then it’s high time you stop doing it. Do not take loans from different lenders. So, suppose you take a loan from three different lenders; all these agencies will send a request to a credit rating agency to ask about your CIBIL score and these are known as hard enquiries. Now all these hard enquiries will hamper your credit score as well. So be judicious with your borrowings and keep your outstanding loans at a minimum.

3. Check Your Credit Report for Errors

When it comes to knowing how to increase credit card score, it is essential to know what is causing your low credit score. How else will you be able to improve it? You can only improve your credit score easily only if you know the real-time status and the reason why your score is adversely. By checking your credit report at least 2-3 times a year, you can know two crucial facts.

The first will be to know where you are lacking and what is ruining your current score. Second is to ensure that there are no errors in your credit report like an outstanding loan that was not taken by you or wrong PAN details. Such errors, when rectified, will also help increase your credit score.

4. Don’t get too many credit cards

If your application is being rejected, don’t just keep applying for a new card repeatedly, as this information is also recorded in the credit score report. If multiple rejections show up on your report, you will be considered credit hungry and your score will decline. So keep an interval of 3 to 6 months so that your credit score gets time to improve before you apply for a new credit card.

5. Monitor Your Co-Signed Loans

Another way you can improve your credit score is to closely monitor loan accounts that you have co-signed and if possible avoid being a joint applicant. Being a joint applicant for a loan can put your credit score at risk if the primary borrower defaults. Defaults of co-signed loans show up on your credit report and adversely impact your credit score.

The above 5 methods are the best ways to improve your credit score but they are not the only ones. Other tips you can follow to improve your credit score are:

Keep track of all your EMIs and repayments to avoid missing deadlines.
Don’t close credit card accounts and open new accounts frequently
Maintain a balance between secured credit and unsecured credit
Do not max out your credit card frequently

As long as you follow the above tips, you will be able to increase your credit score. However, do keep in mind that improving your credit score can take time from a few months to over a year depending upon how low your credit score is to start with.

Why Does Having Good Credit Score Matter?

Improving your credit score might seem like a time-taking and difficult task. But there are multiple reasons why you should take the trouble of maintaining a high credit score. Here are some key advantages you get, if you have a high credit card score:

1. A good credit score indicates that you are responsible when it comes to repaying loans and credit card bills. No financial institution wants to lend money to a person who is not trustworthy.

2. If you have a high credit score, banks and other financial institutions will grant you a loan at a lower interest rate. A good score also means lesser paperwork!

3. Though various other factors play a crucial role while granting a loan, one cannot ignore that your credit score and history is one of the main deciding factors.

4. A good credit score will make your loan application more attractive and can increase the speed at which your loan application is processed.

5. Also, a higher credit score increases your chances of getting approved for a longer tenure to repay your loans. This means you can pay smaller EMIs for a long time, which means less burden on your pocket.

6. The increased credit card limit is another benefit you will receive if you have a higher credit score.

FAQs

ARN No: Nov22/Bg/15

Sources:

¹https://www.hdfcbank.com/personal/resources/learning-centre/borrow/7-smart-ways-to-improve-your-cibil-score

https://www.outlookindia.com/website/story/business-news-five-steps-to-improve-your-credit-score/400989

https://www.fullertonindia.com/knowledge-center/good-cibil-score.aspx

https://indianexpress.com/article/business/banking-and-finance/good-to-know-3-reasons-why-you-should-check-your-credit-score-credit-report-regularly-7863559/

https://www.cibil.com/faq/understand-your-credit-score-and-report

https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=763#5INT

https://economictimes.indiatimes.com/wealth/borrow/what-does-status-like-closed-settled-and-written-off-in-your-credit-report-mean/articleshow/52554129.cms

https://indialends.com/things-you-wont-find-in-credit-report

Know 5 key tips and tricks to improve your Credit Score with minimal effort

Get ₹1 Cr. Life Cover Just @₹615^@1/month