Tips To Boost Your Credit Score In No Time – Boosting your credit score can take time and effort, but it can be done with the right strategies. Here are some tips that can help you improve your credit score:
- Pay your bills on time: Late payments can have a negative impact on your credit score. To avoid late payments, set up automatic payments or reminders to make sure you pay your bills on time.
- Keep your credit card balances low: High credit card balances can lower your credit score, so try to keep your credit card balances as low as possible. This means you should use a small percentage of your available credit.
- Check your credit report regularly: Your credit report contains important information about your credit history, including payment history, credit accounts, and credit inquiries. Reviewing your credit report regularly can help you identify errors or potential fraud, and take steps to correct them.
- Dispute errors on your credit report: If you find errors on your credit report, dispute them with the credit bureau that issued the report.
- Keep old credit accounts open: Length of credit history is an important factor in determining your credit score. So, keeping old credit accounts open can help boost your credit score.
- Get a secured credit card: A secured credit card is a good option for people who have no credit history or have had trouble with credit in the past. With a secured credit card, you put down a deposit, which becomes your credit limit.
- Limit the number of credit inquiries: Every time you apply for credit, a hard inquiry is made on your credit report, which can lower your score. Limit the number of credit inquiries by only applying for credit when necessary.
- Get a co-signer: If you have no credit history or a poor credit score, getting a co-signer can help you qualify for a loan or credit card.
Credit Score Ranges
| Credit Score Range | Category |
|---|---|
| <300 | No Score |
| 300-550 | Very Low Credit Score |
| 551-620 | Low Credit Score |
| 621-700 | Fair Credit Score |
| 701-749 | Good Credit Score |
| 750+ | Excellent Credit Score |
Tips to Boost Your Credit Score
Close Any Unused Credit Cards
In the long term, having an open credit card that isn’t being used will hurt your credit score. Besides, you don’t even need more than two credit cards, because the more cards you have, the more statements you’ll receive, which can lead to confusion and mismanagement.
Consolidate Your Debts
It is critical to lower your debts in order to improve your credit score. However, keeping up with several repayments can be difficult, resulting in stress and missing payments.
If you’re having trouble paying off various loans, consolidating them into a single loan with a reduced interest rate can be a good idea. This will not only simplify your finances by reducing the number of debts you have to pay, but it will also save you money on interest.
Lower Your Debt-To-Income Ratio
The debt-to-income ratio is a basic yet crucial idea for improving your credit score. It’s defined as the proportion of your entire indebtedness to your total income. As a result, a larger debt-to-income ratio suggests a higher degree of debt, and a lower credit score.
Divide your monthly debt repayments by your gross monthly income to get your debt-to-income ratio. Most experts agree that keeping this percentage below 40 is critical for a high credit score.
Increase Your Credit Limit
If your credit card issuer wants to boost your credit card limit, accept it gladly because a greater credit limit reduces your credit utilisation without requiring any further work on your part. Furthermore, a bigger credit limit is useful for emergencies unless you are unable to manage your desire to splurge, in which case a smaller credit limit may be preferable.
Review Your Credit Report Regularly
Every credit agency in India, including CIBIL, is required to give individuals with a free credit score and report once a year. This means you may get a free copy of your credit report once a year and check it for any errors.
Even if you have paid off any debts, they may still be recorded on your credit report, lowering your credit score without your knowledge. To raise your credit score quickly, submit any inaccuracies to the appropriate credit agency and have them deleted from your records.
In just a few months, you’ll be able to rebuild your credit score using these simple hacks. To keep your credit score high in the future, it is even more important to follow sound financial habits in the long run, such as making timely payments and not spending beyond your means.
