How can I improve my credit score
It is important to remember that there is no instant quick-fix for increasing your credit score overnight or in a couple of weeks. However, it is possible to significantly improve your score in a short timeframe by following the tips listed below. It is also good to periodically check your credit score so that you remain updated on your credit health.
1.Obtain your credit report right away: The simplest and quickest thing you can do is to ask the credit bureau for a copy of your credit report and check your credit score. Look for reporting errors that might be unnecessarily dragging down your score. (e.g. a loan you might have repaid in full but is still shown as having overdue payments.) Once you identify any errors, you should file a dispute resolution with the bureau to rectify the matter immediately. Removing wrong entries on your report will improve your credit score.
2.Ask for a higher limit on your credit card: If you spend more than 30% of your total credit card limit across all your existing cards on a monthly basis, it will decrease your score. Ask for a higher limit and maintain or reduce your current monthly expenditure so that you use less than 30% of your new limit. This will increase your score right away. There is no point in getting a higher limit and then spending more than usual – this will have a reverse effect and only cause your score to drop further.
3.Keep your credit card balance low: Try and maintain a low balance across your cards. A higher credit limit gives you more flexibility to make payments and keep your balances low. This will help your credit score.
4.Set up payment reminders: This will help you avoid missing payment deadlines and ensure your score does not drop because of this reason. Repayment history can account for up to 30% of your credit score so it is very important to make sure all your repayments are on time and made in full. Your bank can send you a monthly email or SMS reminder or you can have the monthly balance paid automatically from your bank account.
It is possible to undertake all these steps in a short period of time and see a positive effect on your score. You could also use a secured card to improve your score. CreditMantri can help with all of the actions above and will guide you through the process of improving your credit score and becoming loan-eligible.