In today’s economy, your CIBIL score significantly determines what kinds of credit are available. Mortgages and credit cards are just a couple of examples. A high CIBIL score is a reflection of responsible financial behavior and can open a lot of doors.
If you are wondering how To Improve Credit Score, you should follow the steps given below –
5 Guaranteed Ways To Improve Credit Score:
Credit scores are important in India because they determine whether or not an individual is eligible for various types of credit and loans.
Here are some tips for improving credit score.
#1. Get hold of secured credit cards:
A secured credit card is a type of credit card that requires collateral, such as a fixed deposit (FD) or savings account, to be issued.
This is one of the fast and tested ways to improve credit score.
The Process Behind Secured Credit Cards:
If you want to get approved for a secured credit card, you will usually have to put down a cash deposit with the issuing bank. The credit card account requires this deposit as collateral.
A secured credit card’s credit limit is typically expressed as a percentage of the total amount deposited on the card. For instance, if you deposit 20,000 rupees, the bank’s policies may set your credit limit at 15,000 or 20,000 rupees, depending on the amount.
You can use a secured credit card like a standard credit card, which includes making purchases, paying bills, and engaging in other transactions.
#2. Take a Housing Loan:
Obtaining a mortgage loan can have a significant positive impact on your credit score. Home mortgages are regarded as “good credit” because they require the borrower to make a substantial and long-term financial commitment to the lender. Making on-time mortgage payments will improve your credit history and make you more appealing to lenders. Your CIBIL score will increase due to the positive changes you make to your credit history; as a result, you will have a greater chance of being approved for additional credit products, such as loans and credit cards, with more favorable terms and conditions.
#3. Consider Educational Loans:
In India, obtaining “good credit” refers to having a loan history that includes not only student loans but also auto or motorcycle installment loans. Your CIBIL score can be improved if you pay for an educational loan listed on your credit report. Lenders will view these loans as investments in your education or assets, indicating that you have a history of making reliable financial commitments. This will increase your chances of being approved for credit in the future. If you are wondering how to boost a credit score, this could be one way.
#4. Credit Card Loans:
Personal loans can be obtained against the existing limit on your credit card through credit card loans such as the HDFC Insta Jumbo Loan. The fact that these loans are not handled in the same manner as traditional personal loans but rather as “credit card” loans is what separates them from the competition. This distinction might work in your favor with your credit score.
#5. Increase the Age of Your Credit History:
It is essential for keeping your credit score high that you keep the account for your oldest credit card active. This is because the length of your credit history is one of the primary factors considered when determining your credit score. The longer you have maintained a healthy account, the more weight it carries in calculating your score’s overall quality. Cutting up your oldest credit card can reduce the length of your credit history, hurting your credit score.
Increasing one’s CIBIL score to 800 or higher in India is a step-by-step process that necessitates responsible financial management. If you are searching for “how to raise my credit score fast” these strategies might help you.
Credit score improvement tips include using secured credit cards, maintaining a mix of “good credit” loans such as housing and educational loans, and keeping credit utilization below 30% of available credit. Maintaining good credit requires ongoing maintenance in the form of consistent, on-time payments and routine credit report monitoring.