Famine In this era, people do not have savings like before. In such a situation, a loan is required for major works. But if your credit score is not good, you may have trouble getting a loan. In such a situation, it is important to keep your credit score or CIBIL strong. This increases the credibility of your loan payment. Today we are going to tell you some things, by adopting them you will be able to increase your credit score.
What is a good credit score?
Credit scores range from 300 to 900. TransUnion CIBIL is one of the four credit agencies in India that prepare credit score reports. The closer the CIBIL score or credit score is to 900, the better it will be considered. A score between 300 and 549 is considered the worst. Similarly, a score between 550 and 700 is considered fair.
Don’t take out multiple loans at once
Try to keep the number of loans taken out in a fixed period to a minimum. To avoid a drop in your CIBIL score, pay off one loan and then take another. If you apply for multiple loans at once, it will show that you are stuck in a cycle of not having enough money. The result of this will be that your CIBIL score will be reduced further. At the same time, if you apply for a loan and repay it successfully, your credit score will increase even further.
take a long term loan
Keep in mind that whenever you apply for a loan, try to choose a longer repayment period. This will ensure that your EMI is low so that you can make payments on time. Your credit score will improve when you do not delay or default in paying EMIs.
Pay EMI on time
Paying off your outstanding loan can have a significant impact on your credit score. In such a situation, it is necessary to maintain discipline at the time of EMI payment. Delay in payment of EMI makes you pay penalty and your credit score goes down.
Keep old credit cards active
If you have old credit cards, you should keep them as long as you can pay your bills in full on time. This will help you build a long, solid credit history, which will help you increase and maintain a good credit score in the future.
Customize credit limit
Your credit utilization ratio has a significant impact on your credit score. The more you can restrict your credit usage to a set limit, the better it will be for your credit score. Hitting the limit has the opposite effect, lowering your credit score. One way to fix this is to contact your bank and customize your credit limit based on your spending.
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