Applying for various loan types like personal loans, home loans, or even credit cards require consideration of your credit score and we at The Lending Monk recognize its significance. Maintaining a good credit score goes a long way with enhancing the chances of obtaining loans and in addition, improves the interest rates and limits offered.
Here are some tips to effectively raise your score in a simple manner in case it isn’t at the desired range.
1. Pay All Bills and EMIs on Time
When it comes to CIBIL score, payment history makes the most impact. Your score is bound to take some hits if there are payments that are overdue.
Quick Fix:
- Enable automatic payments for bills and EMIs.
- Embrace the use of apps dedicated to budget tracking.
- Prioritize your loan repayments (especially personal loans and credit cards).
2. Maintain a Low Credit Utilization Ratio
At all times, your usage of the available credit limit should always be at 30%. Anything greater unfairly portrays risk dependency plus having low scores associated with credit.
Action Steps:
- Make an effort to settle outstanding balances completely with a credit card.
- Increase your limit if you continue to max out your cards on a frequent basis.
- Refrain from overspending and avoid using more than one credit card.
3. Regularly Check and Correct Credit Report Errors
Credit report errors could be costing you a lot more than you think. Even the smallest details, from wrong statuses to duplicate accounts, may lessen your eligibility for loans.
What You Should Do:
- Claim your free credit report through CIBIL, Equifax, Experian, and CRIF Highmark.
- Challenge claim discrepancies, with respect to identity theft.
- Confirm necessary changes not exceeding a 30-day period for updates.
The Lending Monk supports you to comprehend and fix credit report issues as part of the financial services we provide.
4. Apply for a Secured Credit Card
A secured credit card is what you should opt for if you are new to the credit scores or trying to rebuild them. It functions like a normal credit card, but comes with a fixed deposit backing it.
Why It Works:
- Strengthens or improves a credit score.
- During estimation, lenders stand to lose less money.
- Ensures disciplined credit utilization.
Using a secured credit card and paying dues on time sends a positive signal to credit bureaus.
Final Thoughts
As with anything in life, improving one’s credit score is a journey that does not take place in a quick period of time; rather, it takes time and requires focus and the appropriate methods. If you want to apply for a personal loan, purchase a house, or build a credit history, these four simple tips will ensure that your CIBIL score improves significantly.
Need Help with Credit Score or Loans?
Contact The Lending Monk to:
- Get a free CIBIL score check
- Access credit improvement services
- Apply for low-interest personal loans with minimal documentation