All banks and
financial institutions check the credit history and score of a
customer before extending a line of credit to them. A good credit
score makes a customer eligible for the best credit cards
in the market. Hence, it becomes imperative for all customers to have
a good credit score.
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Some tips that will
help you increase your credit score are as follows:
- Multiple credit options: There are many customers who apply for multiple credit options at one time like a credit card along with a loan. When you do this, the banks and financial institutions will check the credit score. However, multiple attempts to check will hamper your credit ratio, which will bring down the credit score. It is mandatory that you wait for one credit option to get cleared before you try for another one.
- Get the best credit cards in the market: If you do not own a credit card, then go for one. This will increase your credit score. Look for a card that reports to all the credit bureaus in India. In case you do not qualify for a regular credit card, go for a deposit one.
- Make regular payments: After you get the best credit cards in the market, it is imperative that you make regular payments. Sometimes people only pay the minimum payment due, thinking that it is surely a regular payment they are doing. This is not the entirely the truth as minimum payments are approximately 70% interest and 30% principle amount. Hence, the principle amount keeps on piling, which adversely affects your credit score. So, it is better to pay a little more than the minimum payment.
- Go for an installment loan: Getting a credit card will only improve your revolving credit score, but you also need to check the installment credit line. Hence, getting a car loan or personal loan will be the best idea. Paying regular payments on your credit card will increase your score surely but paying monthly EMIs regularly will increase it by manifolds. This way any financial institution or bank checking your credit score will know that you are responsible enough to take care of both lines of credit.
- Regulate your credit card expenses: One of the best ways of getting a good credit score is by regulating your spending habits. You have the best credit cards with you with ample benefits but that does not mean that you will use them to the limit. The last statement balances are reported to the credit bureau, which, if enormous, can affect adversely on the score regardless of the fact that you might have paid it in full. Always ensure that you spend less than 30% of your credit limit on the card. This way you will have a floating limit to carry on. Also in case you are a compulsive shopper, then create SMS and email alerts for credit limit usage. This is the best way to keep a track of your expenses.
All these tips
should initiate a better credit score for you. However, the best way
would be to keep a track of your expenses and ensure that your
payments go on time.
