7 Steps Towards Maintaining A Healthy CIBIL Score

A healthy credit score is one of the essential factors to get an affordable loan and instant approval. A credit score proves the creditworthiness of an individual in terms of taking a debt burden. A good credit score is 750 and more. A credit score is an essential aspect of borrowing. A good credit score signifies you as a responsible borrower and that makes you eligible to borrow. Similarly, with a low credit score, the loan provider will not be able to trust you and offer a loan. A good credit score check makes an individual financially independent and able to borrow at the time of need. Some important steps to improve your credit score are:

  • Pay bills timely: Remember your due date. You need to keep track of your due dates for the loan. You need to be careful about your EMI dates too. It is important for you to note the EMI date so that you don’t miss or delay your payment. With on-time payment comes a good credit score. You can easily get a good credit score by making timely payments. A single delay in payment is reflected on your credit report that reduces your credit points significantly. It is important to pay your bills within the due date and not after the date has been crossed. For Business Loan visit : business loan apply online.
  • Pay full bill amount: The full bill amount may initially be a burden, but you will end up being in an expensive borrowing experience. When you don’t pay the entire bill, you will end up damaging your score and you make your loan expensive with late charges. The minimum payment option is given to you, but if you are building your credit score you should not do it. When you pay a minimum amount of your loan or bill, you keep an overdue or outstanding amount in your loan.
  • Do not close credit accounts: Credit accounts should always stay. Do not close the credit account even if you are not using it. Make sure you keep your credit account open and do not close. The longer the credit history the better it will be for your credit score.
  • No multiple borrowing: Do not keep applying for new loans and credit cards. When you keep applying, the hard enquiry run on your credit score will damage your credit score. So, it is okay if you need funds or you have got a rejection, too many applications will not do any good to you. You need to go for other ways and not multiple applications.
  • Credit mix: It is important for you to have good knowledge about your debt profile. Credit mix is important. It is vital for you to have the right balance between secured and unsecured loans. If you keep taking an unsecured loan every time or you opt for a secured loan, you will end up hurting your credit score. Make sure you balance when you take a loan. A good mix is important.
  • Debt to income ratio: The debt to income ratio should be less than 30%. The ratio means the percentage of income you pay for the debt. Always make sure that you borrow after you complete an existing loan if you want to build your credit score.
  • Don’t use multiple credit cards: too many credit cards make expensive bills which increases the possibilities of default and delayed payment.

Wrapping up

A credit score check is essential. Check your credit score from time to time in order to get the right borrowing experience. When you check your score, you are updated about the fact that you are eligible to borrow or not.

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