Which Credit Score I Should See?

In the world of finance, you see a lot of products like loans, credit cards, Insurance, mutual funds, hedge funds, etc. if you dig into each category, you will find a lot of sub products which would support its title. That is just tip of the ice berg. When you dig deeper, there are financial products you won’t even understand.

Let us take an easy example of credit cards for instance, if you apply for one at a particular credit card vendor, you will be given a lot of credit card options like silver, gold, platinum, etc. In these categories as well there will be different terms for different cards with different benefits and different rewards.

Just like any other financial product, there are types of credit score as well. Yes, we are right! There are many credit bureaus who record your financial transactions with them and when demanded by you or a future lender they produce the report.

Now you would be thinking, how many score do I have and how should I understand if which credit score should be referred for my financial transactions? Do not worry; you are not alone to get this question in your head. As many of us are clueless on what is a credit score? How is it important? How many of them are there?

We will answer all these questions here,

A credit score

A credit score is a number that allows the lender to judge your financial standing. With the help of a credit report the lender can see and gauge how you make your payments and if you are making all your payments on time. If you have a better credit history, you will act as a hot lead for loan lenders in the market.

How is it important and how to improve your score?

Every individual has a credit report, loan lenders in the market always seek people with good a goods score so that they can lend money with ease. Not only in terms of loan but a good report can help you land at your dream job; get you a fancy house for rent and many more. The credit score is making its way out of financial market and entering into common grounds as well in terms of verification process.

If you monitor your credit report from time to time, you will know where you stand and this can lead you to act on improving your score. Just make sure, you make all your payments on time, use less debt, have variation in loan accounts and do not close any existing credit lines. For example, if you have a chance to close your car loan, try to close it as it will save you a lot of money in car loan interest rate but do not close your credit cards. The older credit cards you have the more you have chances to get your score up in no time.

 

How many are there?

As mentioned earlier, there are many credit score available with different bureaus in India. Credit bureaus like Transunion, Equifax, CIBIL, etc. are the main players in this business. As far as Indian lenders go, they prefer getting CIBIL report for your verification purposes. If you are considering one score, you should consider CIBIL.

Their scoring models are entirely different from one another and the score range also differs. This is one particular reason why, every lender just sticks to one credit report which then makes the process easy for them.

Even though you might think, you only have one credit score to monitor, you are wrong. You have a dozens of score which can give you different credit rating and get you confused. Instead, just focus on one and if necessary two for your reference. Check with your bank which credit rating they prefer and start monitoring the same, because in future if you are considering a loan, you will go to your home bank first.

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Know the rules to repair your credit score quickly

When I am in the need of some cash liquidity and suddenly the loan gets rejected! What a nightmare. No sign of any help. can’t approach any of friends or relatives as my principals do not allow me. My credit card limit has been exhausted and I am just left with some hard cash with me. When I am thinking about the reasons for the rejection of my loan, I take all the minute details and rewind it in my head. Where did I go wrong?

The first thing I encountered was my credit score. My loans were getting rejected because my credit score was low. But then I thought, I have not taken any loan to date. Why is my credit score low then? All my information is correct. No identity theft issue with my report. I pay my regular credit card’s bills before the due date. I have always been the most responsible payer. I have no add-on cards which can make a possibility of default. While I checked my report, checking all the details, I came to know that while I was too young in my early 20s, I had applied for the credit card. I never used it but the yearly charges kept on adding and have become a huge default. Oh, Freak. How come I never noticed this? Now, when I am in a dire need of cash, all I am facing is rejection from everywhere. Just because many years ago I applied for a credit card and never bothered if it existed!

The above saying is of Amit, a responsible payer! What went wrong in his case? When we apply for a credit card, they have some annual handling charges. The amount can be as minimal as 500 Rs. But that matters. When we do not pay that amount, surcharges are added to it. Interest keeps on adding to it. And then it’s considered a default. Suppose when this gets to our notice, we clear out the outstanding without even settlement and pay the complete amount. The card is then closed. But what about the credit score? How soon will it be changed? When will the score go up? When will mistakes be removed?

When trying to increase CIBIL Score, always remember one thumb rule. Nothing changes overnight. Neither was a dip in your score overnight. Nor will increase in your score overnight. We have to be patient while any of these process. There are few of the options which can be used to make this process a little quicker. But again, nothing happens too quick.

  1. Secured Credits for short term
  2. Secured Credit cards

One of the easy and fast way to repair the credit score quickly is secured credit card. A secured credit card is the one where you keep an amount of money as a fixed deposit. You can use your credit card as normal. And pay when the bill is due. Supposing you fail to pay the bill on the due date, your bill amount from that fixed deposit amount will be deducted. When this process is done without any errors for few months, it shows your credibility and also how responsible the borrower is. Which helps in getting the score up in short span.

  1. Gold Loan

One more type of secured credit for a short span is a gold loan. Get the cash against any of your gold ornament for short span. Be a responsible payer, and keep paying the EMIs on time. Withing a very short time compared to others, your score will start boosting.

  1. Unsecured Credits for a short span.
  2. Credit Cards

When using normal credit cards, make sure you do not miss any payments. Use 30% – 40% of your credit limit. Even when you have the capacity of repaying the full credit limit amount, do not have this practice. It is a major mistake which people make. When more than 40% of the limit is used, causes a dip in the score. Make sure this is not the reason for your bad score. When the correct amount is used and repaid on time, even this would get the score up!

  1. Personal loan

Take a personal loan from either a Bank or NBFC which is for a short span. If any dues remaining of the previous loan, try clearing out all of them as soon as you can from this loan and parallelly pay this loan’s EMIs as well!

 

If done patiently and diligently, there is no scope that your score will not increase. Patience and Responsibility are two main things one has to keep while they are in the process to increase CIBIL score. Do not worry as there is a solution to everything!

How I got 800 credit score without any loans

Credit Score becomes an important aspect when it comes to taking loans or getting a credit card. Today, we have the facility to buy or get something which we once had thought of buying few years down the line. A vehicle, a house, a property or the higher education, anything can be conquered by taking a loan today than tomorrow. With few percentages of interest which you have to give it to the bank, you have the access to that amount of money much earlier than today! These amounts are quite big. When we talk about small amounts gold loans and credit cards are perfect examples.

As your score is majorly the reflection of how credit healthy you are i.e. how responsible are you for paying the credits you have taken, would determine the worthiness. When one had not taken any credit say in terms of card or any type of loan they do not have any score and is called a No History customer. And suppose one has taken any type of credit and when he/she pays the EMIs on time, is when the good score is built. But, what if one does not want to take any loan but still wants a good score? What is a good score? Any score which is above 750 of the range of 300-900 is considered a good score.

Let’s understand what Sahil has to say in achieving 800 scores without taking any loan!

Hi, I am Sahil from Delhi. I wanted to buy a new house. When I went to axis bank and inquired for axis bank home loan, to my surprise they asked me to first build the credit score. I had never taken any loan in past, neither did I owe any credit card. I am with dad in his business and never had any chance to go and take any kind of credit. I went home back and researched. How can I build my score?

Let me share my secret of getting 810 scores without any loan. So I read all the parameters of how the score is calculated. The 5 parameters viz. Payment History, Amount Owed, Length of Credit History, New Credit and Types of Credit. which makes the score was my whole Idea about how I was supposed to go! So I first started with a credit mix. I applied for 2 types of credit card. Secured Credit Card and the normal Credit Card. After a few months or regular use and payments, I applied for one more card. I made sure that I do not overuse my credit limit. I never used my card for more than 35-40% of its total limit.

The credit score is then achieved and reflected in the bureau report after 6 months. I checked my free credit score to make sure that what I was doing was correct and error free. I had maintained a good record and kept working on the same lines. In less than expected time, I was rewarded with my own hard work and efforts. My score was 810 and too without taking any kind of loan!

With Sahil’s experience, one thing what we can take is always to try working on the major 5 parameters of the score which determines it. Try paying the amount which is due on time, take credit but repay, do not take undue advantage, do not close old accounts, keep applying for new credits but do not act credit healthy and lastly have a good mix of secured and unsecured credit with a fixed or revolving type of credit mix. A healthy score will be no away from you!

My Credit Score Disappeared! Please Help

Is it possible for a person to have no credit score even when a few years before he had an excellent credit history? Can this change happen all of a sudden? What should one do if one finds himself in such a situation? Let’s get the answers to these questions.

As you may very well know by now, the credit score is a number that is generated based on the information that is recorded on your credit report. If you own credit cards or have taken some debts, then the lenders keep updating the information relating to your accounts to the bureaus. An impeccable payment history and a low credit utilization helps in raising the score. Information relating to late payments, too many debts, high utilization ratio brings the score down. But whether the information reported to the bureau is positive or negative it eventually falls off the credit report. In order to ensure that new positive information keeps getting added to your report you need to keep your credit profile active.

There may be situations like the ones given below, due to which your credit report wasn’t updated with new positive information. If such is the case, your score would show a downward decline.

  1. Overseas- If you travelled abroad for several years and closed all your credit cards and other debts before leaving, your credit history will start fading away. Credit bureaus in India only record information relating to accounts opened within the country. So if one plans to return back after a few years, and wants to maintain his CIBIL score, he must keep at least 1 account open and active, by charging few expenses every month and paying the full balance at the end of the billing cycle.

 

  1. No credit- If as a part of a debt management program, you decided to go all cash and stopped using credit cards or other debts, your credit score will start falling after a while.

 

  1. Using spouse’s credit- If after marriage, you closed all your accounts and depended only on your spouse’s credit, your own credit score will disappear over time. Without a good score, you will have a tough time getting approved for credit, in case you require it in future.

Check your free CIBIL report from the three credit bureaus and find out what your current situation is. If your credit score disappeared due to these reason, don’t despair. There are many ways to rebuild your credit history once again. But you will have to get back to taking loans and using credit cards. Here are some credit building ideas which can help you establish a good score once again.

  1. Secured credit cards- Without any credit score it may be difficult for you to get approved for usual credit cards. But in order to display good credit behaviour one needs to have an active account. A secured credit card is a good way to get a small credit line. You need to make a deposit to get this card, which basically serves as a credit limit. The deposit shields the card issuer from any risk of losing money due to non-payment of dues. Make regular on time payments on this card to ensure positive information gets recorded in your report. With a good payment history and low credit utilization you will see a raise in your score.

 

 

  1. Personal loans for low CIBIL score

Another way to build up on credit history is to take an instalment loan like a personal loan. There are many private lenders who given personal loans even to people with a low CIBIL score. They charge a higher rate of interest to cover up for the extra risk that they take to lend to individuals with a low score.

  1. Authorized user

If you become an authorized user on someone else’s card, the account information will be recorded in both the credit reports. On time payments and low utilization maintained by the primary card holder will benefit your score as well.

If you do not have any new account reported in the past 6 months, or an open credit account that is older than six months, your credit score will start declining and slowly disappear. That is why it is always recommended to keep old accounts active and open.

Will All The Credit Score Check Hurt Your Score?

There will be a lot of articles available on various websites which would give you a lot of information on how credit score works and how to maintain it. What many websites do not inform you are how your credit score gets hurt and what the factors which hurt your score? There are many factors which influences your credit score, building the credit score is rather hard than one mistake taking it for a toss. Your credit report will give you a clear idea on how you are doing financially and how other banking institutions look at you in terms of credit worthiness.

Imagine you are about to book your dream car, you have managed to save some money for down payment of your car. You are thinking of getting a loan as supplement for your vehicle purchase. Now, you are not sure what your credit rating is and if the credit report will help you get an auto loan. You plan to do a cibil score check before you apply for a loan but one of your relatives stop you from doing it explaining if you check your credit report you may end up hurting your score. You have less time to think about it and your dream to purchase that car starts to fade away. What would you do? Will you take the risk and check your score? Will your personal inquiry on your report hurt the score? Is yes, by how much?

There will be a lot of things which would run in your mind, especially when you have different opinions getting thrown at you. Do not worry, we are here to help.

First of all, let us just understand what influences your cibil score and what their shares are.

These are the main factors which influence your cibil report,

  • Your payment history (35%)
  • Number of debts (30%)
  • Age of your credit (15%)
  • Types of credits on your account (10%)
  • Credit inquiries (10%)

Yes, Credit inquiries have some weightage to your report, but this can hurt your chances of getting a loan harder than any other factors mentioned above.

There are two types of inquiries,

Hard Inquiry vs. Soft Inquiry

Hard inquiry

Whenever you apply for any type of loan or a credit card, the banks or the Non-banking financial corporation conducts background verification on you. With your residential, professional verification the lender also conducts verification on your credit report. Every inquiry made on your cibil report by the lender is termed as a hard inquiry which hampers your cibil score and you may end up with low cibil score. A hard inquiry stays on your report for 7 to 10 years which can be seen by your future lenders. If there are multiple inquiries made on your cibil report at short span of time, the lender may deny you a loan thinking you are not credit worthy this is why the past lenders did not sanction you a loan.

So the next you get a call from various credit card telesales department, understand that your yes to them will lead to hard inquiry and we all know the credit card companies are always strict in terms of verification and may deny you a credit card. You may end up having a hard inquiry on your report without a credit card in hand.

Soft Inquiry  

There are many individuals who know what the importance of having a good cibil score is. Many people check their credit score from time to time just to evaluate how they are doing financially and if they are credit worthy for future. If you, yourself are inquiring about your credit report, it will be termed as a soft inquiry. This inquiry also stays on your report for a very long time, but the lenders don’t mind soft inquiries. These days, there are corporate companies who check your credit report to check how you manage your finances so that they can offer you a job.

It is important to check your report from time to time so that you are ready with a strong report whenever there is a need of urgent loan in family. Not only for financial purpose, a strong report will help you in many ways in life.

Will Arranging My Debts Help Boosting My Credit Score?

A credit report provides a comprehensive picture about one’s credit position. The credit score which is an important part of the report factors in various variables when calculating the score and this rating helps in predicting an individual’s creditworthiness. In case you have a low score then there could be a variety of reasons for it and depending on the problem you can solve it using various solutions. Arranging your debt can help you in boosting your credit score. Let us consider a few ways in which arranging yore debt can give a boost to your credit score.

  • Consider Balance Transfer:

Balance transfer is an option that can help in better management of debt. This option can be useful both for home loans and in case of piled up credit card debt.

Home Loans run for long tenures and it is possible that during this time the interest rates change a couple of times. If you realize that the loan you took years back is at a higher rate than the current prevalent rate for home loans in the market then you could consider getting a home loan balance transfer after weighing the costs and benefits. A lower interest rate could help lower you over all liability and you may find it easier to pay your reduced installments in case you are struggling with the repayment. Longer loan tenure if agreed by the new lender can also help you in repayment.

Credit card debt is the most expensive form of credit. If you are struggling with repaying your credit card dues then balance transfer could help you. In this process you transfer your unpaid dues on one card to another card (preferably one that charges a lower interest rate), the new card company provides some interest free holiday before you need to start repaying your dues which can help the card holder. The acquiring card company may also allow repayment in EMIs which can help in boosting your score.

  • Fore-Closure Could Help in Certain Cases:

All loans and credit card dues are included in the CIBIL Report, one aspect that influences credit score calculation is the balance between secured and unsecured loan. In case your unsecured loan (personal loan, credit card dues) burden is higher than secured loan burden then it could impact your credit score negatively. In such a scenario fore-closing these (unsecured) loan could help in boosting the credit score. Though loans that run the full course are better for the credit rating in the long run but in some instances a prepayment may help.

  • Prioritize your Debt

Needless to say repaying all your dues on time and regularly is important. However if you have too much debt and are struggling with repaying them then you must consider prioritizing the repayment. Repaying one which has the highest interest burden could be a good way to start. However it is important that you list out all your debt along with their interest, overdue amount and remaining amount. If you find it tough to repay all you monthly dues then you could talk to lenders and request a loan restructuring. Here the loan tenure is increased which lowers the EMIs and makes it easier for you pay your monthly dues. You aim should be not to allow interest fee and penalties to add to your debt burden. This is definitely not one of the ways to improve credit score fast but could give you results in the long term.

Ideally one should not reach a position where their debt burden becomes so high that they find it difficult to repay their monthly dues. However in case this does happen then you should consider rearranging your debt in an attempt to better your credit rating.

Is Free Credit Score A Scam?

It is the season of scams so it is no surprise that we take everything with a pinch of salt especially so if the promise is to get something free. In September 2016, Reserve Bank of India made it mandatory for the credit agencies to provide a free credit report to individuals once in a calendar year.  There are four credit agencies in India so you can get four credit reports in a year which makes it one in each quarter. Each credit bureau has a different process giving you a free credit report when asked, so let us go through each agency’s process and understand if free credit score is a reality or a scam?

How to Get Free Credit Score From Various Agencies?

Checking your credit report from time to time is recommended as it lets you assess your credit health. Since there are few ways to improve credit score fast, it’s better to be prepared in case you need credit and stay credit healthy. With scores available now without you having to pay anything now it’s easier to access your credit score without having to pay anything.

Below we discuss in brief how you can get (if at all) free credit score from various credit agencies:

Experian: For those looking for a free credit report from Experian, you need to follow the link that lets you access your free credit score.  Few basic details like name, Permanent Account Number, email Id, date of birth need to be entered for you to get the report. You will be sent a voucher which is to be used when you are taken to the payment page instead of making an actual payment. This voucher is mailed to you within 48 hours of you making the request for a free score. After you answer a few questions you would be sent the report within three to five days.

Equifax:  They provide the free report only after you download a mobile application which is available for both Android and IOS phones. You need to provide basic KYC details along with you Aadhaar Number. The applicant is provided a temporary PIN that is used to authenticate themselves and then they can login after 24 hours. After answering a few questions about your credit history the report is sent to you.  If you do not have a smart phone then there is a separate process for getting the free report. Those without smart phones need to send scanned documents along with an application to the given email id , documents required for this include address. Getting the report through the application make take two days, if doing it through the email route it make take longer time.

CRIF High Mark: They have a link on their homepage for getting a free credit report. Those desirous of getting a free credit report need to fill in some information to authenticate themselves. Information required here is more derailed as compared to other agencies. Once the application form is filled and the customer information is authenticated they can download the report. The report is generally available within 48 hours.

CIBIL TransUnion: Initially CIBIL had the option of submitting only a physical paper based request but now both options of getting it online or physically are available. For getting it online you need to fill in the required information after following the link that is provided for getting a free score. Applicants need to authenticate themselves before they can download the report. If all the steps are completed successfully the report can be accessed within a couple of minutes. For those who choose to send the documents physically, it may take them seven working days to get the login details. Once these details are received the applicant can login to the site and can access their report.

So all in all getting a free score is not a scam. In some cases it may be time consuming or the applicant may find the process cumbersome but usually they can access the free score even if it takes time and some effort.

 

 

 

 

Who Owns my Credit Data?

Even if you are a little bit responsible towards your personal finance, then it’s likely you have heard that you ought to have a high score. But who calculates your score, and who owns your credit data? The answer is “credit rating agencies”.

What are credit rating agencies?

Credit rating agencies are the firms that collect the data of individuals and companies so as to create their credit report as well as their score. Basically, they monitor the financial activities of the people through their loan repayments, spending habits, etc. and use the information to assess their creditworthiness.

The top rating agencies in India include CIBIL, CRISIL, ICRA, Experian, Equifax, etc. Some of these offers credit score of companies or individuals only, while others offer the score of both.

What types of data credit rating agencies collect?

A credit rating agency such as CIBIL is mainly interested in gathering the following information:

Length of Credit History

The length of a person’s credit history plays a big role in their credit score calculation. This is because if they have a long history, it means their financial behavior can be assessed with higher accuracy. On the other hand, if a person started using credit only a year ago or so, then it’s difficult to predict whether they are responsible towards finance management or not.

Repayment History

The repayment history is another main factor that affects the score of a person or a business. For instance, if you have taken a few home loans in the past but repaid them all on time, which means that with the majority of the EMIs paid on the due dates, then you can get a high score. However, if you have often missed your credit card bills or EMIs in the past, then the rating agency will look at it as a negative aspect and deduct points from your score accordingly.

Credit Card Utilization

Your credit card usage data is also something that the majority of credit rating agencies are interested in. This is because it alone can tell a great deal about your personality and your spending habits.

If you use more than 35% of your credit card limit almost every single month, then it shows that you are “hungry” for credit. The same happens when you apply for new cards frequently. These things work against your credit report and thus must be avoided.

Is my CIBIL score also a part of the credit data?

Not only your CIBIL score a part of the credit data stored with the credit rating agencies, it’s the most vital one. This is because it sums up your entire credit data.

Your CIBIL score is calculated on the basis of a variety of important factors/data that are shared above. So, if you apply for home loans, personal loans, etc.  then the lenders may not even need to look at your cibil report. They can just look at your score to see whether you have high or low creditworthiness.

What’s a good CIBIL score?

A CIBIL score ranges between 300 and 900. Thus, 300 is the lowest score that you can theoretically get, while 900 is the highest. That said, the floor and ceiling are rarely found in a credit report. Most lenders instead categorize the CIBIL score in four categories:

  • Poor- 350 to 550
  • Fair- 550 to 650
  • Good- 650 to 750
  • Excellent- 750 to 900

If you want to enjoy a safe and secure life finance-wise, then it’s important that you take measures to keep your CIBIL above 550. However, ideally, you should strive for achieving a score of 650 or above.

The Bottom Line

So, now you know who owns your data. It may make you feel uncomfortable, but it really shouldn’t. This is because even though the credit rating agencies collect your data and provide your score, it’s you who controls your credit report. If you instil good financial habits in yourself, then you can achieve a good score. Similarly, if you are not careful enough, then you can also ruin your score yourself. Thus, be wise, and make yourself aware of the right credit-building measures.

Credit Score Check: Why is it Necessary?

If you have never applied for a loan or a credit card in your life, then it’s possible that you never needed to check your credit score. However, this doesn’t mean that you should check your score only when you need a loan, credit card, etc.

Even though people are learning about CIBIL and its significance, most still avoid CIBIL score check unless they really need to. This is a wrong attitude to have towards your creditworthiness.

There are many good reasons to check your credit score, some of which are:

  1. Disputes and Discrepancies

Discrepancies and mistakes in credit reports are more common than you think. This is because banks and credit rating agencies manage the records of hundreds of thousands of customers, and millions of transactions. Thus, it’s possible for a discrepancy to occur in your repayment history or personal details. That said, if it’s left unchecked, it can ruin your credit report badly which can make it difficult to get an ICICI home loan, personal loan, etc. in the future.

Only by checking your credit score and credit report you can identify mistakes if there are any, and have them corrected.

  1. Identity Thefts

Credit rating firm Experian says that identity theft is the largest contributor to fraud in India. In other words, you are always at a risk of someone trying to impersonate you in the financial sphere and rob you of money. However, you can prevent yourself from becoming a victim by simply conducting a CIBIL score check every once in a while.

If you notice a sudden drop in your credit score or an unusual activity in your report, then it can be a sign of an identity theft. So, you can immediately contact your bank and get it checked.

  1. Score Improvement

You can’t predict the future. Even if you are financially strong today, you never know when you may need a personal loan down the road. However, in such a situation you must have a high credit score to get one without having a hard time. This is again where the importance of checking your score comes in.

If you want financial security, then you must monitor your score. Most importantly, you should never delay taking the initiative.

  1. To avoid further damage when about to apply for loans

Whenever you apply for an ICICI home loan, car loan, or rather any type of loan, the bank checks your credit score. If it’s high enough, they approve your loan. However, in case it’s not, then they can reject your application. However, that’s not the only way how it affects you. In addition to a lost opportunity, you also risk damaging your score too. The reason behind this is credit report inquiries.

When a bank requests a credit rating agency to provide your credit report, it’s called an inquiry. So, if one bank rejects your loan, then you may apply at another bank, and then once again, and again multiple times. This means a lot of inquiries are made to the credit rating agency. This is bad for your score as it shows a credit-hungry behavior.

The problem can be avoided by checking your score before submitting your loan application. This is because if your score is low, then you can wait until you have made it better.

With a high score, your chances of getting a loan approved are high. This means there are few inquiries, and thus low to no damage to your score.

  1. Better Interest Rate

Checking your score also allows you to enjoy great interest rates. This is because when you know you have a high score, you can use this information to get leverage when discussing loan details with your bank.

Banks know that a person with a high CIBIL score is likely to repay their loan on time. So, they don’t mind offering a lower interest rate than the standard for you.

Your credit score plays a big role in your financial matters. So, be sure to check it every once in a while. Besides, it’s free. So, why not?

How to Make a Good Credit Score Even Better?

We live in a time where having a good score is crucial for financial security and a comfortable life. However, the question is- what exactly is a good score?

Generally speaking, if your CIBIL score is below 600 then it’s considered a low CIBIL score, and if it’s above 750, then it’s considered a good score. But here is the thing- you should never be happy with your score.

It should be one of your continuing goals to improve credit score even if it’s good enough. This is because if you stop caring, your score can drop over time and become a “poor score” one day without you even knowing. In addition to that, working towards the best possible score ensures that when you need a loan or a credit card, then you are able to obtain them without any problem and at attractive terms and interest rates.

How do you make a good score better?

There are many things that you can do to take your score from “good” to “great”, such as:

Don’t Break the Streak

Since you don’t have a low CIBIL score, it means that you have been paying all your loan EMIs, insurance premiums, and credit card bills on time. So, if you want to increase your score, even more, it’s important that you never break this habit. In fact, you should do whatever it takes to never miss a single payment.

Your repayment history is one of the biggest factors to affect the credit score. In some credit rating agencies, it can make for as much as 30% to 40% of your entire score! Thus, the only way to improve credit score on a constant basis is to be punctual with your payments at all times.

Create a Healthy Credit Mix

Did you know that by simply increasing the variety of credit in your report you can easily increase your credit score by 10% to 20% or even more?

A lot of people are able to push their score only to a limit because their credit report is based on just one type of loan or credit card only. So, if this is the case with you as well, then you can add new credit profiles to your portfolio and see the magic happen! For instance, if your experience with credit in life is only on the basis a personal loan, then you can apply for a credit card or a car loan. You are sure to notice a major improvement in a short period!

Develop a Habit of Frequent Report Checking

If you can’t remember when the last time you checked your credit report was, then it’s something to worry about.

Monitoring your credit report is extremely important when you want to increase your CIBIL or credit score as much as possible. This is because it helps you track your progress and alerts you when or if your score starts to drop.

Checking your CIBIL report frequently also helps you prevent identity thefts and other frauds that can rob you of your savings and even greatly harm your credit profile as well.

Put an End to Your Credit Card Debt

If you love to use credit cards but make minimum payments more often than not, then it’s possible that you have a huge debt on your card(s) which is really bad for your score.

Although technically you are allowed to make minimum payments to avoid penalties and other kinds of charges on your credit card bills, from your credit score’s point of view, it’s bad. In fact, if you apply for a new loan then it’s quite possible that the lender will reject your loan application even if your score is high because of your high debt.

When it comes to credit score, it’s important to remember that you must not rest on your laurels once you have secured a good position. You must always pay attention to your finances to ensure that your score not only stays high but also makes an improvement over time as well.