A credit score is a critical factor to consider before applying for a loan, and a poor credit score can be a torture for people who have an urgent need of money. Medical emergencies, mortgage repayment, or any such crisis, can knock your doorstep at any point-of-time where getting a loan might seem like the only choice.

The Reserve Bank of India mandates a guideline, where all banks are required to check credit scores of an individual, to confirm their creditworthiness. So, for a person who has a poor credit score, it would merely mean that he/she is not creditworthy enough to get a loan because of their credit history.

Your credit report and rating comprises a financial snapshot that represents you to the business realm. Your credit history and score can affect how easily you can get a loan; make big-ticket purchases or take out personal loans. Lenders, banks, and creditors use credit scores to determine and assess the risk of extending credit or loans to you. Every bank and lender have diverse parameters to issue a specific loan amount and to determine your creditworthiness by considering your credit history along with your present situation.

A credit score ranges between 300 and 900, 900 being the best. The better your credit score, the more significant are the chances of credit approval for personal loans, business loans, home loans, loan against property, credit cards, etc. in India. Improving your credit score can take a significant amount of time. Usually, it takes around 18 – 36 months to improve your overall credit score. If you possess a poor credit score, then we recommend a few simple moves that will help you enhance your credit score and improve creditworthiness to a significant extent.

Get rid of all your unpaid balances. Spend just as much as you can pay back within the billing date. Talk to your loan manager and negotiate to close your loan account by paying off any outstanding dues. Such unpaid dues or hefty dues on your credit cards bring your score down substantially. Paying it off will positively reflect on your credit score. Also, it is better to stick to just one or two credit cards. It becomes way easier to keep track of your repayments.

Check your credit score often, by doing so you can keep track of inaccuracies in your report. If you have an error in your report, dispute these errors immediately by taking the necessary steps. Because sometimes lenders can also cause blunders while entering your data. Every financial institution must act on these disputes within 30 days. Once resolved, it will show improvement in your score.

Pay your EMIs on time. If you are thinking of making big purchases like a car or home, then make sure that you don’t miss the deadlines to pay them back. Paying these on time will positively reflect in your report and credit history. A dip in your credit score can impact your desire to own that dream house or dream car. Credit bureaus consider this as one of the essential factors while assessing your credit rate. Up-to-date payments will keep your creditworthiness intact.

Old credit accounts are gold credit accounts. If you are not using your old credit card accounts, then you don’t close these accounts; instead, you can use these to your leverage. A good credit card account maintained well with timely payments is like a gold account. It provides that much-needed stretch to your credit score; by keeping these accounts for as long as you can, will reflect a solid repayment history.

Control your credit utilization. Don’t rely on credit cards for everything. Credit cards are amazing and easy to use but using it beyond the limit can impact your credit score. It is more beneficial to stick to 30% or less of your credit utilization ratio.

Raise your credit limit. By doing so, you will have a lot more credit available at your disposal. Moreover, if you manage your credit wisely, and keep your credit utilization below 30%, this will positively impact your credit score to a great extent.

By developing these smart practices, you can improve your credit score. A higher credit score indicates that one has disciplined spending and repayment habits which eventually leads to better terms and offers from banks and credit card companies.

Last but not the least, take maximum advantage of best available credit monitoring services like Cyberior Cyber Fraud and Digital Identity Theft Protection. Cyberior, through its advanced credit services, not only monitor your credit profile but also notifies you in case of any suspicious activity and provides complete resolution, if required.