A high credit score is mandatory for the people who want to have a loan at best competitive interest rates. People in order to improve their credit score they apply for too many credit cards and struggle to maintain them. Credit card usage and paying on deadline will definitely improve your credit score, but along with the credit card your expenses will also get increased and it will become hard for you to maintain the cash flow on a monthly basis.
Getting a credit card is not that much daunting task for the new user who satisfies the eligibility criteria of the bank. But, to maintain a good credit score is not that much easy, you must pay every EMI on time every month and one-time delay is also effected on your credit score, it’s a very challenging job in itself.
If you’re looking for a loan at low interest rates and for this you want to improve your credit score or want some tips to maintain the credit score, we are here to help you out. You follow these below-mentioned habits that are enough to have a healthy credit score:
Check your credit scores and reports regularly:
A credit score is a primary factor that lender looks into applicant profile. People with a good credit score will get good options to opt for loans. Credit score generally varies from 300-900. People having a credit score 800 above are considered as excellent credit and 750 above as good credit, both of them will get better options to select the offered loans. In order to improve your credit score, you must first check your credit score from any of the 4 credit bureaus then check for the errors, if any, in that report and report the same to the financial institutions and rectify it. Credit reports you can get for free on any online financial websites.
Repay on time every time:
A credit score is calculated based on different factors, one of them is your credit history. In credit history, you can find the complete financial transaction details. Where you invested the amount, where you have taken debts, what are the credit debts you have, how you pay your credit card bills, etc., to maintain a good credit score don’t miss out any date of repayment otherwise you can set the reminder or set up an automatic money transfer from your account. Missing out the repayment date will impact greatly on your credit score and also you will be penalized with a late fee.
Apply for credit cards only when required:
Many common people think that maintaining credit cards with different offers in the market will help them to improve their credit score, but in real time scenarios it will not work out better for your credit score. Taking unnecessary credit cards and applying for loans frequently will make your credit hungry and it will impact negatively on your credit score. Lenders will consider you as credit hungry and offer a loan with high-interest rates.
Also, whenever you apply for a new line of credit, it gets recorded in your credit history and that also impact negatively on your credit score.
Be within your credit limits:
Even though you’re getting good credits, don’t make use of it without requirements. Lender before processing of your application look at your credit utilization ratio (credit card balance to available credit limit) and debt to limit ratio. Try to maintain your credit card ratio not more than 30% for good credit score.
Maintain long and stable credit history:
Lenders consider the age of your credit lines to know how responsible you’re in repayment of your credits. Long and stable credit history will have a good impact on your credit score. In case, if you’re a new credit card user and want to increase your age of credit lines, you can make use of your credit card at least once in a month and repay it on time that will help you to improve your age of credit. The lender will get more trust of the older customers, so when your age of credit increase, the lender can offer you more exciting offers on your account.