Published Article Details

How to improve your credit score

Posted by: Girija Gadre on May 01, 2017, 06.30 AM IST

Financial institutions and banks rely heavily on your credit score while granting new or enhanced credit/loans. Your credit card and loan repayment track record is reflected in the score. It is important to have a good credit score when applying for a loan. Here are ways to do so.

Paying EMIs, credit card dues on time
Pay EMIs and credit card dues before the due date. If for any reason it is not possible to make timely payments, contact the lending institution and seek a restructuring of the loan. You can set up alerts for due dates or register an auto debit instruction with your bank to deduct the dues before the due date.

Using credit card wisely
Not only the minimum amount due, but the whole amount outstanding for the period should be paid before the due date in order to ensure a good credit standing. Also as a habit, it is always prudent to use one's debit card instead of credit card for making daily purchases and expenses.

Checking for discrepancies
It is important to keep a track of one's credit report and check if there are any discrepancies. In case of any discrepancies, the same should be highlighted to the credit information bureau by raising a query/dispute here . (https://www.cibil. com/resolve-report-inaccuracies)

Keeping credit low
As and when funds are available, it is wise to close the unsecured loans (personal loan, credit cards) first and then the secured loans (home loan, car loan).

Points to note
* A joint holder's low credit score can also hamper the loan prospects in case of a joint loan application. It is important to check the joint holder's score before hand.

* One should keep a healthy credit mix of secured loans and unsecured loans


(The content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.) This article appeared in Economic Times dated May 01, 2017, 06.30 AM IST

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