Don’t have the perfect score? Improve your Credit Score right now with these 6 simple hacks.
Ever had a loan application rejected because of a low Credit Score? Or, maybe, you had to give your favourite Credit Card a miss?
In the world of finance, credibility is everything and the easiest way to earn that credibility is by improving your Credit Score.
Your Credit Score is perhaps the most important tool that you have at your disposal when it comes to growing your financial portfolio. While a score of 750+ makes it easy to access loans and Credit Cards of your choice, any score which is less than 700 will eventually force you out of the most lucrative deals.
Additional Reading: How To Track Your Credit Score Like A Pro
If your Credit Score has put you in a blind spot, try these time-tested hacks to set things in order:
Hack #1: Take Care Of Your Payment History
Your credit payment history forms a major chunk of your Credit Score. If you are trying to improve your Credit Score, clearing your existing debts should be on top of your priority list. The longer you wait to get rid of the pending due on your Credit Card, the harder will it be to erase the damage from your Credit Score.
Hack #2: Keep Your Temptations In Check
Whenever you apply for a new line of credit, the lender will pull up your credit history. While it may seem like a harmless thing to do, every time someone digs into your credit history, your Credit Score goes down. While you are working towards improving your Credit Score, it’s in your best interest to hold your horses (for a little longer!) no matter how tempting the new offers may look.
Hack #3: Reduce Your Debt-To-Income Ratio
Debt-to-income ratio is the amount of debt you have versus the income you make. The higher the ratio, the lower your score will go. If you have a huge debt-to-income ratio, it’s time for you to roll up your sleeves and pay off your debts.
When you bring down your debt-to-income ratio, you will not only see a remarkable improvement on your Credit Score, but it will also come in handy the next time you apply for a Home Loan or a Car Loan.
Additional Reading: Why Your Debt-To-Income Ratio Is As Crucial As Your Credit Score
Hack #4: Report An Error When You See One
Although rare, it’s quite possible that your credit report has an error in it. If you find your Credit Score in bad shape despite having cleared the dues on time, don’t sit back and mull over your bad luck. Instead, go ahead and report it to the authorities. Once the error is amended, you will be happy to see the numbers reflecting strongly on your Credit Score.
Hack #5: Time Your Payments Well
If you are applying for a loan, make sure you have settled your existing dues first. The same rule applies when you are trying to get a new Credit Card. If a lender pulls your Credit Score near the end of your billing period, there is a good possibility that the lender will find a high balance on your card. To the lender, it’ll appear as a debt that you have not yet paid. Ensure all your payments have been made for the month before you make a new credit inquiry.
Hack #6: Closing An Old Credit Card? Think Twice!
While you may have reasons to close your existing Credit Card, doing so can adversely affect your Credit Score. An old Credit Card with a good payment history is an asset to have. If you have a good credit utilisation ratio with your existing card, think hard before you decide to shut it down.
Additional Reading: 5 Golden Tips To Manage Your Credit Card Better
Do More With Your Credit Score
As you work on improving your Credit Score, you will find a wealth of information on BankBazaar to guide you in the right direction.
When you feel confident about your Credit Score, go on and gift yourself a world of infinite possibilities. Be it Credit Cards, Personal Loans or more, you will find in here everything that you need to make your choices fuller and better.