A credit card score is essential as it helps you get a loan quickly. TransUnion CIBIL is one of India’s four credit card bureaus generating reports on credit card scores.
A score between 750 to 900 is considered the best score. Scores below 750 but above 500 are considered fair, and scores below 500 and above 300 are considered non-favorable. The question now is how to improve the credit card score.
Seven ways to improve credit card score
Don’t take loans in bulk.
It doesn’t mean that you should not take out a loan at all but don’t take debt from various sources simultaneously. Take one or two loans at a time and settle them before taking a new loan.
The more loans under your name, the more you will be noticed as having insufficient funds, and your credit card score will fall sharply. Whereas if you take a loan and pay it timely, your credit scores will likely increase.
Customize your card limit
If you don’t have cards with a customized limit and use it more often and sometimes exceed the limit saying that yes, I can pay that extra, there’s no big deal. It will only decrease your scores.
Buy a card and stick to the limit of that card, as the more you can track it, the easier it gets to impact your credit card score positively. You can also restrict your card limit by calling the credit card company, or you can simply buy the card with a restrictive limit from the start.
Create credit card history by having a combination of card
Choose a variety of cards for specific purposes which will give you benefit. For instance, if you travel more often, you should get a credit card on paying for airline tickets either providing points or allowing discounts.
If you don’t have a credit card and want to get one, your CIBIL score will be low as a new cardholder. It’s tough to increase your score spontaneously, so to ensure that you borrow a healthy mix of secure and insecure debt with a combination of long and short term. It will improve your credit score and set a good base for your report.
Catch up on past-due accounts
If you’re behind on your bills, bringing them current could help. While a late payment can remain on your credit report for up to seven years, having all your accounts current can be suitable for your scores. Additionally, it stops further late payments from being added to your credit history and additional late fees.
We should remember a rule of thumb when it comes to credit cards: never leave a penny behind when it comes to settling the dues, as in the long run, if you haven’t paid a few cents only, they can charge a high interest out of this, and it will impact on your score.
Don’t miss payments
Never and never should you mess with the scheduled time of payment as the credit card companies have higher hidden interest for non-repayment of dues in time.
It can hamper credit card scores before we can even know it, so it’s better to repay the due before the due date itself for a better score. Doing this can help you gain a good profile remark.
Don’t apply for multiple cards.
One of the above points is written to have variety, but it doesn’t mean you should buy every other card just for the sake of variety. The more the cards are, the more indebted you will be.
Be wise in your choices and prudent in your behavior regarding credit cards. Maintain and balance the combinations of cards in a way that will pave the path to improving credit card scores.
You can read: How to use credit card wisely.
Don’t give credit card companies a hint about the risk.
Credit card companies keep an eye on each of their users in a focused way such that no user can default and hide from them. Increasing your score in many ways, but only one thing will be enough to decrease your score.
Therefore, always try to have an intelligent debt profile where details are constructed and organized so your score increases, increasing your reputation as a customer.
Apart from these, there are zillion other ways, but applying them consistently will give you a nudge towards improving your scores in the lowest possible time.
Important points to remember
Have patience in your approach
While applying any of these ways to increase your score, you must clear your mind and understand that it’s not an overnight change. It will take time to be specific months to attain a good score.
You can choose any approach on the internet, but the application process takes a lot of time to bring your report back in line. So don’t just keep switching methods. Keep doing what you choose to, and the results will be in your favor.
Management of debt is essential.
Management is the key to reaching your goal in the lowest possible time. So try and manage all your credit cards and, prepare a report, track that report in a fixed interval. This way, you will have ideas about how and where you need more care.
Access the areas where you need improvement
Create a debt chart and remark the ways you opted for and how those ways helped you to improve your scores. In this way, you will improve your CIBIL score, and your credit rating will increase overall.
It’s an easy process to increase your credit card scores, and it does give you a few extra points when it comes to getting a loan. The more the scores the better your profile is hence easily you will get a loan.
Credit cards are a great tool to uplift your profile in case you ever want to take out a loan, but the truth will always be that we should not rely much on credit cards after all they are debt.
Read more: Saving and its importance.
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