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How to improve your Credit Score? – Smart tips

Credit Score! I hope you have heard this term many times in your life, haven’t you? In my opinion, a credit score is one of the most important measures for your financial health. I believe nowadays that if you have a good credit score, you can have easy access to many financial instruments as it tells the lender how responsible you are and how you are performing in financial terms.

The better the score, the easier you will be approved for the new loans and credit lines. Based on your credit score, you will be judged in Banks. 

Well! What about you? How’s your it? Is your credit score good? I have seen people with the mindset that a credit score doesn’t help eventually, but wait… let me tell you how it helps? A good credit score opens the door to the lowest available interest rates.

Wasn’t this enough to convince you? Read the full blog to check out how a good credit score helps and how you can achieve a good great score!

Why Does Your Credit Score Matter?

What Is CIBIL Score | Check your Cibil/Credit Score | Moneytap

A good and excellent credit score will help you save hundreds of thousands. Someone with excellent credit gets a better loan and interest rate and even everything that involves financing. Banks consider them lower-risk borrowers, and they even get good perks from the banks.

At the same time, people with low CIBIL scores are considered high-risk borrowers with no perks and even fewer lending capacities. Additionally, a poor credit score can affect your ability to get a new house, car and even life insurance.

So, how you can improve your CIBIL score, let’s find out!

See : How to Check Free CIBIL Score Online – [Complete Guide]

Paying Balances Strategically

The portion of your credit limit that you are using should be paid strategically. Using the limit up to 30% of your limit will be even better. The lower, the better. You have to be sure that your balance is low; when the card issuer reports it to the credit bureaus, the simplest and easiest way is to make the payment before the billing cycle ends.

Impact: Do you know your credit utilization is the second biggest thing in your credit score? The biggest factor is paying your debts on time.

You can set calendar reminders to help you make your payments on time.

Authorized User

CIBIL Score | Credit Score | Credit Report | Loan Solutions

If your friend or relative has a credit card account with a higher limit and a good history of on-payments, ask as an authorized user.

That adds the account to your CIBIL score, and this is how it will help you. You will be benefitted from their positive payment history.

The account holder doesn’t have to let you use the card. Or you are even giving you the account number for your credit to be improved.

Impact: If you are a newbie, this will help you. The impact will be smaller for those with established credit trying to offset misstep or lower credit utilization.

Keep a Diverse Mix of Credit

You are keeping different types of credit account factors into your score. A lack of credit mix becomes a burden.

It won’t impact your credit score, but diversification will positively impact and look better for the lender. Don’t be in a rush and open a different account right now, but remember doing simpler things like opening a credit card or shopping around for lenders if you don’t have one.

Impact: Having various forms of credit (including car loans, credit cards, and student loans) shows that you can manage different sorts of loans and pay them off on time. It will create trust. Keep this pro tip in mind for improving your credit.

Check Your Credit Reports for Errors

Can you check your credit score without an SSN? [2022]

People make the mistake of not rectifying the errors in their credit statements. Common errors can bring your score down. You can check your credit score for free from any of the reporting agencies. Moreover, you can request a free weekly credit score.

If you see something inaccurate or notice that something is missing information from your report, contact the credit reporting agency for any dispute in error.

Impact: Mistakes can happen, and any negative information on your credit will have a major impact on the score. Hence, any inaccurate information should be disputed as soon as possible.

Advantage of the 30-Day Pre Approval Window

Credit Scoring Models make exceptions when you apply for certain types of loans. For Example, if you’re trying to get pre-approved for a mortgage or a car loan, you can make multiple applications that will be considered one hard inquiry.

When it comes to financing a car or a home, you’ll want to apply for these loans within the same time frame. If you’re getting pre-approval for a car loan, try to apply to all the lenders within 30 days.

Similarly, hard pulls from different mortgage lenders happen within a 30-day window if you’re in the market for a mortgage.

Frequently Asked Question

Can my credit score go up 100 points in a month?

For most people, increasing a credit score by 100 points in a month is still seems to be a dream. However, if you pay your bills on time, it helps you eliminate the consumer’s debt; large balances can be harmful to your credit statement and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.

Is CIBIL score and credit score the same?

People ask for this generally, whether CIBIL Score or Credit Score is the same or not. So, here is the difference, any credit bureaus in India can provide credit scores. CIBIL only provides CIBIL Score. But, most of the banks prefer CIBIL Score.

Does Credit Score matter in India?

Credit Scores are very much relevant in India; they are popularly known as the CIBIL Score in India. Banks and Other Creditors in India can easily check their credit scores.

What is CIBIL Credit Score?

CIBIL Score is a three-digit numeric summary of your credit history. The score is derived from using the customer’s credit history.

Bottom Line!

When it comes to improving your credit score, no one solution fits all. But, if you always pay on time and handle credit responsibly, you’re already on the right track. You can also learn to calculate credit score and how it’s calculated, so you can better manage your financial life.

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