Your credit score measures your ability to repay credit. Therefore, a good credit score is necessary to meet your financial goals, particularly those for which you need to borrow money. Building and improving credit takes time and effort. You need to manage your money responsibly over time to do so.
There are several steps you can take to do so. Here are a few:
1. Check your credit report
Your credit report contains your complete credit history and all the data used to calculate your credit score. The first step towards improving your credit score is to get a copy of your credit report, and check it for discrepancies or inaccuracy. Make sure that there are no late payments listed incorrectly, and that the amounts paid and owed match. That way, if there are any errors, you can correct them by talking to the credit bureau. To perform a free CIBIL check, simply visit the Bajaj Finserv website and enter your basic details to check credit score for free.
2. Watch your credit card balance
The smaller the percentage of your credit card balance (or any credit limit) you use, the better it is for your credit score. Thus, to improve credit, you need to reduce or even eliminate your credit card balance. Consolidating multiple credit card balances with a personal loan would be a good idea to improve your credit score. This will also help you eliminate your small credit card balances, leaving you free to use just one or two go-to cards that you can use for everything. Using just one or two credit cards reduces the risk on your credit report as well.
Additional Read : 4 reasons for personal loan rejection and how to avoid them
3. Keep old accounts open
Don’t be in a hurry to get rid of old debts that you have paid off from your credit report. In fact, you should keep those accounts open just to show a potential lender that you are capable of paying off the debt you owe. The presence of such well-paid debt accounts improves your credit score, and the longer it has been there in your report the better it is.
4. Pay bills on time
A simple way to keep your credit score up is to pay all your bills on time. When you go a long time without late payments, that improves your score. Continuous late payments, on the other hand, severely affects and reduces your score. Getting back from such a situation will take time, but you can start by paying your bills on time from now on. Additionally, while it’s a good idea to save money for any big purchase you are planning to make, don’t do it at the cost of your bills.
5. Fix your late payments
Late payments are bad for your credit score; missed payments are even worse. Neither of these will leave you alone, even if you were to close the accounts. So, it would be a good idea to get organised, and set up a reminder for your payments for your credit cards and loans.
Thus, improving your credit score is more about getting organised with your money than anything else. The more organised you get (and stay), the faster your score will improve.
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. In case any inconsistencies observed, please click on reach us.
*Terms and conditions apply