Talking straight to the point, improving your credit score depends on many factors such as your lifestyle, how do you spend your money, on what type of needs and wants you are spending on your hard earned money. All these can count on your future lifestyle.
Thoroughly going through your financial spends and savings, you can make a plan to improve your financial position in your life. We will now point out some aspects on how to improve your credit score. A good credit score can get you loans easily with lower interests and some can have better loan terms which can in-turn have a stress-free repayment. Points to consider to improve your credit score:
1. Check your Credit Score: First thing to check while you are on your credit improving journey is your Credit Score. Print or get a digital download your Credit Card Statement regularly and check which type of financial transactions cost you your credit score to go down and plan out to decrease the transactions or the expenses.
2. Timely Bill Payments: To increase your credit score, always pay your bills on time and every time. Also, keep in your mind to pay the bills fully to the extend of how much you have spent to buy the things or services and not the minimum payment from the credit statement. By paying only the minimum, you will incur penalty as well as much more interest while paying the minimum. Credit Card companies holds the maximum interest rate in todays market, so you don't mess with credit card spends and repayments.
3. Pay Off - High Interest Debt: Focusing on paying your high interest debt as soon as you can to increase your credit score and will help you in your credit utilization.
People tend to take their credit score lightly when loans are much easier to get on various grounds depending upon your financial situations or history now-a-days, but then they either forget or pay only the minimum amount of the loans which again pile up on their credit statement and in the long run, they face heavy interest rate on their minimum payments, try to avoid such situations
4. Diversify Your Credit: A mix of different types of credits like credit cards, installment loans and some mortgaging can also positively or heavily impact your credit score and put some financial stress into your life. So before going or applying for a new loan or a higher limit credit card, you should always check if you are able to take up the extra financial stress from the day one of spending with your new cards or by taking one more high interest loans from the banks or any third-party borrowings.
5. Old Accounts: Many don't understand or know this as well. Closing your old accounts can hamper your credit score and also your credit history. Apart from not closing your old accounts, you should also maintain some transactions and be regularly active with your old accounts which can help you in your hard times while applying your loans or credit cards.
6. Limit Credit Applications: This factor is lesser told, lesser known to the public when they apply to get any new credit cards. The point here is no matter how many times you apply for your new credit cards in banks or other institutes, a hard inquiry is gone through your credit score before your credit card reaches you which in-turn decreases your credit score.
Every time a bank or any other institutes check on your credit report, your credit score always come down slightly, this can impact your credit score very badly in the long run. So try to minimize your credit card journey and enjoy the spending keeping in your limits.
7. Credit Responsibility: One another point people tend to forget and fall prey is maxing out on their credit cards and yet taking up loans from various sources from the market which gives them not so comfortable sleeps by the end of the period or month end repayments. So be responsible on your financial discipline and maintain your credit by paying off as soon as possible to improve on your credit score.
8. Seek Professional Help: You can also seek some professional help like discussing your issues with some good credit counselling agencies, if you are facing some significant credit challenges or also go with a financial advisors who are specialized in credit repairs.
Some Pro Tips:
Credit Card Balances: You should always keep your mind to spend only 30% of your credit card balance. And try to repay the full amount on due date or before to see an impact on your credit score.
For example: If your credit card limit is INR 1,00,000/-, then you set the limit of 30,0000/- for your spends. This mindset will help you positively in your long run of financial growth and financial strength, improving on your credit score as well
Improving on your credit score can take time, you need to be patient and consistent with your strategy to see positive changes to your credit score. Improving on your credit score is not a numbers game alone, its the habit of being financially disciplined in your life and being rewarded over time for a healthy financial strength and also on your credit score.
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