Tis’ the season to celebrate harvests, so why not harvest a good Credit Score and make merry!
While India celebrates various harvesting festivals across the country, it is only apt for you to sow some promising financial seeds that will give you a great Credit Score harvest!
Wondering what it takes to build an awesome Credit Score? This one’s for you!
First Things First – The Baseline
Any plan should have a starting point. Before you figure out how to improve your Credit Score, it helps to check where you currently stand so you can plan your improvement accordingly. Based on your score, you could fall within any of the following brackets:
0-300 – Lots To Do!
If your score falls within this bracket, you need to get your improvement plan in action as soon as possible if you wish to stand a decent chance of approval when you apply for a Credit Card, Personal Loan, Car Loan, or Home Loan. The lower limit of this bracket, i.e. a zero, simply means you don’t have a credit history yet.
300-600 – Hmmm…Needs Work!
At this stage, your score still needs a considerable amount of improvement. In this range, lenders may feel hesitant to lend you credit easily, so it’s best you work on quick ways to better your score by getting your basics right.
Additional Reading: How To Track Your Credit Score Like A Pro
600-720 – Not Bad, But Not Great!
If you find yourself here, you don’t need too much work to harvest an awesome Credit Score – you can just make a few good financial moves and you’ll see yourself in a comfortable place in good time!
720-800 – A Groovy Zone!
A score anywhere within this bracket is a direct reflection of your good credit management skills. You’re totally on song and just need to continue what you’ve been doing.
800-900 – You Can Give Us Tips!
If your score belongs to this elite league, you can give us tips about Credit Scores, because you’ve clearly mastered the art of credit management, you rockstar!
Additional Reading: Check Your Credit Score On The Go
Okay, so now that we know the various possible baselines to expect, here are some good practices that will help you reap a prosperous harvest in your credit portfolio.
Mix Up The Crops
Once you have an active credit history in place, make sure you add variety to your portfolio by maintaining more than one type of credit account. For instance, it doesn’t help your score a great deal if you go in for 2 Credit Cards back to back.
You’d rather space out your Credit Card decisions and maybe explore the loan market and mix things up. Why? Well, multiple accounts are great for your Credit Score, and when lenders see that you have experience across the various products available, they’ll feel more confident about giving you credit, which, in the long run, is again great for your score.
Additional Reading: 3 Things You Should Know About Your Credit Score
Understand The Harvesting Season
Every time you apply for credit, the lender runs a hard enquiry of your Credit Score, and this affects you score, so basic logic dictates that you space out your credit applications and keep chances of hard enquiries to a minimum, thus not letting your score get hurt.
Give Back What You Owe
We cannot overstate this particular point, because, if ignored, it can eat your credit history like a virus. What good is credit if you don’t know how to repay your lender(s)?
Before charting out any plan to improve your Credit Score, you need to understand that making your payments and managing your existing Credit Cards and loans is key to your success. Every missed or late payment will eat away points from your hard-earned score, so make sure you set up reminders and ensure smooth repayment of whatever credit you’ve borrowed.
So you see, folks, your Credit Score, like any crop grown on a farm, needs care and maintenance – the fruits of your success are totally worth it.
Additional Reading: What Are The Components Of Your Credit Score?
Ready to kick-start your plan?