It is very important to improve your online credit score to make sure that you are able to get any kind of loan. A credit score represents the creditworthiness of individuals, on the basis of which the loan provider decides whether to approve or deny the loan request. Individuals with a high credit score find it very easy to get instant approval and affordable loans in the market. The credit building process is time-consuming, but with the right activities, you can always get a good credit score above 750 easily. Let us take a look at a few of the tips that help you improve your credit score and get your required loan amount approved by the bank or non-banking financial companies.
Do not keep any unpaid balance for Cibil Score
It is important to understand that whenever you make a payment, whether it is a credit card bill or loan monthly installment, you cannot keep any overdue or outstanding. By carrying forward the outstanding balance on your credit account, you will only damage your credit score further. Stop making minimum payments when you have the option to make the full bill payment. Restrict yourself to a low bill amount so that it is easy for you to make the full bill payment without keeping any outstanding.
Get control of bill payments
Bill payment is an important criterion in order to improve your credit score. There are four important factors, of which payment history accounts for around 25% of the entire credit score. It has the biggest impact on your credit report, which can improve or damage your credit score thereafter. A very simple way to improve your credit score is to avoid making late payments under all circumstances. You can always create a filing system, either digital or paper, to keep track of the monthly bills you need to pay.
Another important way is by automating the bill payment right from your registered bank account. Individuals can also set payment alerts so they know when the bill date is actually coming. Make sure you are not delaying your payment right after the due date. When you do so, you not only damage your credit score, but you have to pay extra charges as well. With a clean track record history, you can simplify your bill payment while also improving your credit score. Know How to Calculate Business Loan EMI Online.
Aim for a credit utilization of 30% or less
The credit utilization ratio is the ratio of the credit limit that you have available to the credit limit that you are using at any given time. After payment history, the credit utilization ratio is the most important factor counted for credit report calculations. The best and simplest way to keep your credit utilization ratio low is by paying your credit card balance in full every month. If you can’t always do it, a good rule of thumb is to keep your total outstanding balance at 30% or less of your total credit limit.
From this, you can actually work on getting it down to 10% or less. If you are able to do this simple thing, you will soon have a good credit score. Having 10% or less outstanding on your credit card in comparison to the total bill amount and credit limit will actually improve your credit score. You can also use the high balance alert feature that you can set on your credit card. Therefore, when you make a high-priced purchase, it will eventually notify you. If you need more credit, you can always ask for a limit increase facility from your credit card issuer. When you raise your credit limit, you can actually keep up to 30% of it unutilized.
Your Credit Limits—and the Hard Inquiries You Make With Them
Are you randomly requesting some kind of loan and new credit options? If yes, you are actually inviting hard inquiries with every application that you are applying for. There are common types of inquiries in your credit history, which are referred to as “hard” and “soft” inquiries. A soft inquiry is when you check your own credit score or give your employer permission to check your credit. Soft credit score checks and inquiries do not damage your credit score.
This says something about a popular myth that credit score checking will damage your score. The real information is that a soft credit score check will not harm your credit score at all. What harms your credit score is the hard inquiries made by various loan providers. Hard inquiries can also include applications for auto loans, housing loans, or new credit cards. If you are applying occasionally, they will not have much impact. What matters is the application of new credit within a very short span of time. If you are trying to improve your credit score, you need to stop applying for new credit when you don’t need it.
Wrapping up
How to check credit score? Check your online credit score with Clix Capital to make sure that you are able to improve it from time to time. It will help you get easy approval and an affordable rate of interest, which makes it the best experience for borrowing.
