Credit Score not up to the mark? No worries; here’s how you can improve it in time for a Credit Card or loan application post lockdown.
The best thing about your Credit Score is that you can always improve it. What’s more? It’s not rocket science. If your current score isn’t impressive, it’s probably because you haven’t spent too much time learning about what goes into shaping your Credit Score. With all of us sitting at home most of the time as we shift through phases of the lockdown, what better time to start getting credit savvy, right?
Here are 4 ways you can walk out of lockdown like a boss with an enviable Credit Score; yes, it’s possible!
Clear Your Dues To Your Best Ability
One thing that can almost immediately improve your Credit Score is paying your Credit Card bill. If you’ve been paying just your minimum due, it’s likely that your total Credit Card bill has piled up into something big. If you want to make a difference to your Credit Score, consider clearing as much of your outstanding amount as possible – not only will this reduce your debt trap, it’ll also shower you with precious Credit Score points.
Additional Reading: All About Your Credit Score
Read Your Credit Report Regularly
Nothing can be as empowering as knowledge. Useful insights can help you mold your Credit Score strategy. With your detailed analysis report available at no cost, you have a golden chance to view all the important details that are shaping your Credit Score. You can see how you’re faring factor-wise, because your credit report will show you latest records of everything from your repayment history to your credit utilisation.
Additional Reading: Different Types Of Credit Cards
Don’t Apply For Credit Just Yet
Let’s say you have a Credit Score of 675 and are planning to apply for a Credit Card right away. While some banks may just approve your application, most lenders may not think you’re credit-worthy. What’s more? The better your Credit Score, the better offers you’ll get. If you’re in this situation, it’s best you wait a month at least before applying for credit. In the meantime, you can read your report and make sure you’re clearing your debts to your best ability. Not applying for credit now will save you valuable points because every time you apply for a Credit Card, Personal Loan, or Home Loan, banks run a hard enquiry on your profile and this affects your Credit Score.
Additional Reading: A Brief History Of Credit Scores
Don’t Close Your Oldest Credit Card
While now’s a good time to analyse and take much-needed personal finance decisions, you run the risk of closing out old accounts that you don’t use anymore. While this is fine for other things, it’s not a great idea when it comes to Credit Cards. Your first Credit Card adds age to your credit history, which, in the eyes of lenders, is a good thing. The longer your credit line, the more experienced you’re going to look in the eyes of banks. That’s not all; your credit line is the backbone of your Credit Score, so closing your oldest card may make you lose out on precious points – you don’t want it, do you?
Haven’t checked your Credit Score lately? Click the link below to get it for FREE in less than three minutes.