A credit score is an indicator of a person’s creditworthiness. It is a 3-digit number that ranges from 300 to 900 and is a numeric summery of your credit health. The better your score, the easier it would be for you to get approval for new loans or new lines of credit. A higher credit score can also open the doors to lower interest rates when you borrow. A score of 750 and above is considered to be a good score.
Such a score is derived by credit bureaus by analyzing your credit history, which contains information such as your payments history, number of loans or credit cards used by you, etc. A person's credit history, is a record of how he/she has used and managed credit in the past.
Credit scores have an impact on several facets of our lives such as approval for loan or credit applications, interest rate charged on a credit facility, loan amount against value of collateral, employment opportunities, insurance coverage/premium etc. It is, therefore important to be aware of not just your credit score, but also ways to improve it.
Some tips to improve your credit score:
Check your credit report:
Credit score repair begins with your credit report. Thus, the first thing to do is to request a free copy of your credit report and check it for errors. "In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. Resolve the errors, if any, immediately with the credit bureau and reporting agency," says Gaurav Wadhawani,, founder, Credit Triangle. Reviewing credit reports regularly is the first step towards credit awareness.
Regular payment of bills:
Something as simple as paying bills – even phone bills — on time can play a very important role in improving your credit score. Your payment history has a significant bearing on your credit score.
Pay off a debt:
Another easy method to improve the credit score is by paying off older loans or debts. Even if the debt amount is small, it is essential to get rid of it by making the payment on time. Minimization of outstanding debt helps to improve the credit score.
Do not over expose yourself to credit:
Although having a credit card can actually help you in being an eligible applicant for loans, however, owning numerous credit cards and making huge purchases with them can reverse the situation.
No credit card default:
Another important measure to improve the credit score is to pay down the credit cards and avoid credit card default. Try to stay within your credit limit.
Timely payment of EMIs
Pending loans and debts put an impact on credit health. Therefore, it is important to pay them back on time. If you are responsible and punctual in your current loan payments, it will surely improve your credit score.
Do not close your active accounts:https://credittriangle.com/
Closing your active accounts can be detrimental to your credit health. The length of a credit account impacts the credit score. Hence, in case there is a credit facility that you have been using for a few years, do not close it. Instead, use it wisely.
Seek professional help:
If you have tried your hand at fixing your credit report, but have failed to attain desired results, you can also take the help of a professional or credit repair agencies to improve your credit score.
Credit Triangle is a one-stop solution for all your credit and finance needs. We help you with credit health management, repair and improvement.