Credit Score is like a report card for the borrower that helps the lender to anticipate whether the borrower will be able to repay the amount in future. The Credit score ranges from 300 to 900, and anything above 750 is considered a good score, which will help you to get loan very easily. In Simple terms, a good score will attract lenders towards you when you need it, while bad score will turn you down.
So here are the ways by which you can improve your Credit Score -
1- EMIs: The best way to get a good Credit Score is to make sure that you pay your EMIs timely. If you are planning to buy anything through EMI then you should remember that your repayment behavior will have a direct affect on your Credit Score. You can use EMI Calculator to get an idea in advance of how EMI will affect your monthly budget. Paying your bills before due will improve your record and hence, your Credit score.
2- Good repayment track record: Credit card might help you to boost your credit score if you use it wisely. Spend in such a way that you could clear off all your balance before the due date. Consistent timely repayments will set a good repayment track record. The Unpaid amount on credit card drags down your credit score significantly. It is advisable to keep the track of your repayments if you have two credit cards.
3- Don't use your full Credit limit: If you have the credit card with a certain limit then it does not necessarily mean that you should consume your limit to the full. Always avoid using your credit card to its full limit. You should not exceed more than 30% of your credit limit, this will show your attitude of financial discipline and will put a positive impact on the lender and all this will ultimately improve your Credit Score. Also always pay full dues of credit card and not minimum amount due.
4- Borrow only if it is necessary: Loan is a facility opted only when it is necessary, don't put so many applications for loan and don't come closer to your credit limits on the card, as this will show your credit hunger and thus will put a negative impact on the lender. We wish you all the best and no matter what have you done till now, but you can always improve your Credit Score by keeping in mind the above points.