If you’ve been running from pillar to post trying to get your loan applications approved, but always seem to come up short, it could be because your Credit Score is down in the dumps.
Banks and financial institutions, nowadays, are extremely wary of applicants with low Credit Scores since it reflects poorly on their ability to make regular repayments towards their loans. If you have a poor credit history, then your chances of getting a loan sanctioned are about the same as looking for health benefits in a can of Coke.
Even if you happen to be one of those people who doesn’t have a Credit Score of any note because you’ve just started working and you don’t have any Credit Cards or loans to your name, there are many ways you can get your Credit Score up in double-quick time.
Additional Reading: Check Your Experian Credit Score For Free At BankBazaar.com
What Is A Great Credit Score?
An excellent Credit Score is anything above 800. If you have a Credit Score equivalent to or above this figure, there’s a good chance lenders will be tripping over themselves to sanction your loan or Credit Card applications. You could even wrangle a free cup of coffee and some snacks out of them while they’re at it.
A good Credit Score reflects well on your payment habits. It assures lenders and banks that you won’t renege on payments and that you’re responsible enough to pay your bills or EMIs on time.
While your Credit Score may not be the only factor in helping you get a loan, it is certainly one of the most important and could go a long way towards deciding the loan amount you can apply for. It could also help you get a favourable rate of interest on your loan.
Additional Reading: How To Apply For Your CIBIL TransUnion Credit Score And Credit Report Offline
4 Ways You Can Raise Your Credit Score In 2017
If one of your goals this year is to raise your Credit Score to a respectable level, then all you need to do is follow these 4 tips and your score should be out of the woods before you know it.
- Stay Disciplined
If you happen to already have a Credit Card or if you’re making repayments towards a Personal Loan, Home Loan or even Car Loan, keep paying your Credit Card bills or loan EMIs regularly and consistently and your Credit Score will keep rising.
These payments have the strongest impact on your Credit Score, so whatever you do, make sure you pay them on time, every time. Missing a few payments or failing to clear outstanding dues can have a negative impact on your Credit Score.
An easy way to ensure you don’t miss any payments is to set up standing instructions through your netbanking account, so that your bills are paid automatically on a specific date every month. This way you can divert funds towards making your card or loan payments before you get tempted to spend it all.
Additional Reading: 6 Terrible Consequences Of Procrastinating Credit Card Payments
- Be Frugal
If you’re really serious about raising your Credit Score this year, then make sure you don’t go berserk with your Credit Card. If you pay your Credit Card bills on time and you haven’t missed any payments, that’s fantastic. But, by keeping your credit utilisation ratio below 30%, you stand a better chance of positively affecting your Credit Score.
However, if you’re one of those people who has trouble sticking to your Credit Card limit, then you could get yourself a Credit Card with a higher limit. But, this doesn’t mean that you can continue spending to your heart’s content. Make sure you use only less than 30% of your card limit to stay safe.
This will show banks and lenders that you’re not the kind who spends recklessly. The more frugal you are with your spending, the better your chances are of raising your Credit Score sooner rather than later.
Additional Reading: A Handy Checklist Before You Upgrade Your Credit Card
- Seek Variety
Like the saying goes, ‘variety is the spice of life’. A solid combination of secured as well as unsecured debt will raise your Credit Score in no time at all. A Credit Card is an example of unsecured debt, while a Car Loan, for example, is a secured debt.
Making regular payments towards both will certainly have a positive effect on your Credit Score, and will show you in an equally positive light in the eyes of banks and lenders. It all depends on how consistent and timely you are with your payments.
Additional Reading: How To Be A Responsible Credit Card User
- Don’t Foreclose Loans Or Cancel Credit Cards
Your Credit Score also depends on how long you hold a credit account. Banks and lenders want to be sure that you are a creditworthy person over the long term as well. If you hold a Credit Card, then try not to cancel it. You could use it to make small purchases or pay your utility bills, and clear the amount every month. This will certainly help you maintain and improve your Credit Score. So, it’s certainly advisable to hold onto your Credit Card even if you’ve paid all your dues.
Similarly, making regular loan repayments over a long tenure will also ramp up your Credit Score and show that you indeed are a creditworthy individual. If you’re looking to build your Credit Score, then foreclosing your loans certainly won’t help in that respect.
Time to get cracking and build up that Credit Score. All you need to do is keep these tips in mind at all times and your score will be in the green in no time at all. Remember, it’s all about staying focused and disciplined.
And if you’re looking to get yourself a Credit Card to help you get your Credit Score chugging along upwards, check out our fantastic Credit Card offers that are sure to catch your eye.