How To Quickly Improve Your Credit Score

If you are guarantor of someone else’s loan and they are in default, that will also affect your credit score.

The credit score of an individual borrower shows their credit history. This includes the number of credit accounts an individual has, the total debt they have, their repayment history, and the loan applications the borrower has made.

Lenders use this credit score to assess an individual’s repayment capacity, based on the approval of their loan application.

Dipika Jaikishan, Co-Founder and COO of Basis, “The CIBIL score is like an adult’s financial report and is a number between 300 and 900. This score is taken into account when doing a loan or credit card application – and help the lender make a decision regarding the borrower’s application.

That said, a credit score above 700 is considered a good rating. The chances of getting a loan or a credit card increase, with a credit score of 750 and above. The borrower also benefits from attractive interest rates. If your credit rating is low, it can be difficult for you to find lenders.

Therefore, if you fall below that, how do you score below 700?

Industry experts say that if they are not borrowing currently, people with low credit scores should try to improve their credit score. For example, try to check your credit report at regular intervals, this will help you spot any mistakes that could lower your credit score.

Moreover, people with a higher credit score should also take steps to maintain it.

Jaikishan says, “If an individual’s CIBIL score is declining, they may have made financial decisions that have affected their score. To solve this problem, he must first understand what affected the score.

Credit utilization rate: If you’ve used more than 30 percent of your credit card limit during a monthly cycle, your credit score tends to drop. Experts say you have to try and limit their use of credit for months to come to see a recovery in score.

Insufficient reimbursement: When you don’t pay your credit card bill or EMI loan in full, the remaining amount accumulates and your debt increases as well. This leads to an increase in the debt to income ratio and your credit score decreases. To avoid this, try to repay your loan amounts in full.

Missed or late payments: If you delay or default on your loan payments, it will likely have an impact on your credit score. Jaikishan adds, “If you’ve missed a recent payment, talk to your bank or provider to see if they can accept your payment without penalty. “

Incorrect information on your credit report: Sometimes your credit report can contain errors and mistakes due to wrong or delayed reports. Experts suggest checking their credit report to see if something is wrong and attempting to correct it as soon as possible.

Repeated requests with credit facilities from multiple lenders: When you have multiple pending applications from various lenders / banks, it also affects your score. Therefore, try not to have too many outstanding loan applications.

Also, note that if you are guarantor of someone else’s loan and they are in default, it will also affect your credit score.

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