Published on December 2nd, 2020 | by Sunit Nandi0
The Top 10 Ways To Maintain A Good Credit Score
There is no denying that new mediums have significantly simplified our routine lives. Be it general interaction, shopping, or looking for some information, there is just the means to do it.
As our demands increase, we develop new means to get the latest goods as soon as possible. The constant desire of the masses to get the latest mediums has made credit purchasing a thing again. Nowadays, knowing and managing a decent CIBIL score is crucial for every consumer.
Before delving into the details, some of you might be wondering what is CIBIL score. You can define the CIBIL score as a consumer’s credit score. It is denoted within three digits and is perceived as your capability of paying off debt.
Maintaining a good CIBIL score is pivotal in modern society for numerous reasons. Be it buying the latest goods or getting a long-term loan for your business; owning a decent CIBIL score is the key to everything.
So what is a good CIBIL score, you might ask? Your score can be from 300 to 900, where 900 is the best. In such cases, anything above 750 is considered a decent CIBIL score. Now that you know the meaning of a CIBIL score and why it is essential let us discuss how it can be improved or maintained.
Here are the best ways to improve and maintain your CIBIL score:
Best Tip to Get a Good Credit Score
Say “No” to Late Payments
While this is a given, the list will not be complete without mentioning it. To get a decent credit score, you need to showcase your ability to pay off debts on your trade line from https://www.boostcredit101.com/tradelines/ timely. Make no exceptions and at least pay off the minimum amount of the credit card or loan instalments.
Another thing to know about is the go-to collections account. If you neglect or postpone your payments, then it can ultimately mount and get turned to a collection agency. In such a case, even settling off the debt would leave a negative impact on your CIBIL score.
You can try to negotiate to see if they can make any exceptions.
Start Using Automatic Payments
Genuinely forgetting to pay off payments is one of the most prevalent reasons behind a bad credit score. In this day, there are multiple apps you can use to set up automatic payments. This way, you will not have to remember the due date, eliminating the chance of late payment.
Additionally, you can also make online payments to avoid getting caught up in a long queue. It is quick and simplifies the bookkeeping process as well.
Keep the Credit Balance as Low as Possible
Staying associated with a credit balance can also affect your CIBIL score. If you have a credit balance equivalent to 35% or more of your credit limit on every card, then even paying off the balance would put a negative impact on your score.
Try showing how you are actively managing your balances while rationally utilizing the credit cards. If possible, you can also try distributing your credit balance over different cards, ensuring the balance is below 35%.
Update Your Old Accounts
The amount of time you have been a loyal consumer to a bank/creditor can also impact your credit score. So, if you own an old or inactive account, then try updating it. The older your positive credit history goes, the better it is for your CIBIL score.
The numbers do not have to exceed five or six, as they will be enough to showcase your capability.
Only Get Credit When Needed
While this one is also obvious, it still needs to be stated. Only get credit when you need it, and do not apply for new items before thoroughly assessing the terms. A consumer with a good CIBIL score can get goods from any retailer, so conduct some research before choosing your retailer.
See what the interest will eventually be and what amount of fees you will have to pay.
Always Correct the Inaccuracies
You may not always be responsible for your credit score, as the creditors can also make a mistake while calculating it. Thoroughly check your credit reports and rectify every dated or incorrect piece of information. You can also file a claim and have it removed or corrected within 10-30 days.
If Possible, Avoid Bankruptcy
This one is also a given, but you need to avoid filing for bankruptcy actively. It is one of the worst things you can do if you are looking for a good CIBIL score. Even if your late payments have not plummeted your credit score, filing for bankruptcy definitely will.
Its effects can last up to 10 years, so avoid taking the easy way out, and work on it if possible.
Negotiate with the Creditors
Yes, it is entirely viable to get some concession on your credits by merely asking. Negotiate with your creditors and see if you can get help.
What is the worst that can happen? You will be told no, and your credit score will remain as it is. So, you might as well give it a try.
Don’t Refrain from Increasing the Credit Limit
Leave the step if you are a compulsive spender; otherwise, increasing your credit limit can solve your basic issue. It is simple really, the more you are capable of spending, the less chance you have of exceeding the 30 per cent limit.
Don’t Overthink About the Credit
This one is neither a given, nor does it affect your credit score directly. However, this small change can eventually help you get better progress and a decent CIBIL score. There is a prevalent misconception that you need to assess your credit score to manage it actively.
While it is rational to check up on your credit score once in a while, checking it weekly or continually using the emi calculator won’t do you any good. Make a habit of checking it once every two months, and you are good to go also, make sure to avoid budgeting errors.
Owning a good CIBIL score is pivotal in the current day and age, especially for retailers and businessmen. Despite being a crucial factor, people are still unaware of how to maintain a good CIBIL score.
That is why the blog has mentioned the top tips to maintain and improve a good CIBIL score. Give it a read and know all about getting a good credit score in 2020.