In recent years, financial institutions have begun to set lending rates and provide various offers to borrowers based on their credit scores.
So, your CIBIL score is no longer a number that determines your creditworthiness.
Hence, if you are looking to avail of credits from a financial institution, you must maintain a good credit score.
Most lenders look for a credit score above 700 among other criteria to deem a candidate eligible for a loan and other credits. With the emergence of credit card app, you can check your eligibility by using an eligibility calculator.
If you find yourself not eligible to avail the loan, you must employ the following methods to raise your credit score.
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How Can You Raise Your Credit Score?
There are several ways through which you can maintain a high CIBIL score. They are
1. Pay Your Existing Emi And Credit Card Bills On Time-
Paying your credit bills and EMI from prior loans on time can help you to raise your CIBIL score. Whenever you miss a payment, your credit score automatically reduces. When you pay your EMI and bills on time, it raises your score and your chances of availing credits with better terms in the future. Therefore, make sure you have no outstanding debt before applying for credit on a loan app or a credit card app.
2. Limit Your Credit Utilisation Ratio-
Your credit utilisation ratio is the ratio between the amount of credit you are eligible to avail and the amount of credit you use. If you keep the rate below 30%, it reflects positively on your credit score. Having a low credit utilisation ratio shows that you are not credit-hungry. Most lenders hesitate to lend to borrowers who frequently cross the 50% credit utilisation ratio.
3. Avoid Applying For Credit Cards And Loans Frequently-
Whenever you apply for credit, the financial institutions check your credit report. This is known as a credit inquiry. If there are frequent credit inquiry, your CIBIL score automatically falls as you will be deemed a credit-hungry borrower again. Therefore, you should avoid applying for online credit cards and loans frequently to make sure that your CIBIL score does not take a hit.
Even if your application for credit cards gets rejected, you should wait for a certain period before considering applying again.
4. Use Your Credit Cards Frequently But Responsibly-
To build a strong credit score, it is pivotal to make disciplined use of your credit cards. New credit card users should learn how to use their credit cards to build up your CIBIL score. For instance, they should not touch the credit limit on the card in the first few months, make full payments, etc.
5. Mix Your Credits-
Keep a mixture of both secured and unsecured credits to maintain a good credit score. You must not rely on only a particular type of loan for your payments. Mixing credits have become more comfortable with financial institutions offering pre-approved offers on their financial products. These offers are available on both secured credits like home loans and unsecured credits like personal loans, business loans, etc. Pre-approved offers make availing of such finances easier and less time-consuming.
Thus, with these few tricks in mind, you can raise your CIBIL score to make the process of availing of credits faster and easier.
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How Can You Apply to Avail Credits Easily?
With a good credit score, availing credits becomes quite easy, particularly with the aid of a credit card app from various financial institutions. For instance, there are different apps available over the internet that has streamlined the process of applying for loans, making payments, and availing multiple offers.
The apps are helpful where you can get A-Z of everything related to availing credits. However, before choosing an app, make sure that you read up on all the loan details carefully. Know your eligibility before you apply for a specific loan.