Finances play a major role in a smooth and stress-free life. If you have managed your finances from day one, you are living a good life. However, for all the bad times that knock suddenly, you need some quick aid in the form of debt. That is where you meet the term credit score, which makes you eligible to borrow. If you need to borrow from legal financial institutions, you will have to be eligible and have a good credit score. A credit score is a three-digit number that represents you in terms of financial health. The score is a reflection of how you have handled your past credit life. However, the moment you find out that your score is not a good one; you can start working for it. Read : What documents required for personal loan.
1. Do not miss out on your bill payment dates. You need to consider this as the best habit to maintain your credit health. Make sure you are automating your payment and make your EMI and other bill payments on time.
2. Do not leave any outstanding amount or balance in your bill payments. It is easier to pay the minimum bill amount, but that will low down your credit score.
3. Do not use up the entire credit limit available on your credit card. You need to keep updating your credit limit by paying up your bills on time. Make sure you are utilizing not more than 60-70% of your total credit limit.
4. Keep checking your credit score without any reason. There are various sites and you can easily get an accurate and free credit report. It keeps you informed.
5. Keep your expenses under control. Make sure you are not using up all your income in expenses and then leaving no money to pay off your bills and then go for borrowing.
6. Have a stable debt to income ratio. This will never let you fall into a debt trap. There should be equal space for debt, income, expenses, and of course savings. Keep more focus on savings as it will help you.
7. Go for debt consolidation if you are having multiple loans. It helps you to settle up all the small loans for one, and pay just one EMI and a single rate of interest that is affordable.
8. Pay more than once in a billing cycle. If you are considering a credit card for regular usage, keep paying some amount more than once that is due. It will help you keep track and the burden is less, which gives you a perfect credit score.
9. Keep your account closed. The more you keep your account open, the better will be the credit age and this helps in building a credit score.
10. Keep yourself away from too many credit cards. It is expensive and disrupts your usage, falling into debt.
11. Do not keep applying for a new loan without need. It will decrease your credit score every time there is a hard enquiry run on your account.
12. Choose the right loan tenure that gives you the right and comfortable EMI to pay. Go for the right condition so that your loan is not a burden.
Read More : Easy tips to improve credit score
Finishing up
The process of CIBIL score check online can keep you updated, and you get good opportunities for the debt at the time of need. Follow these rules to stay on track.
