Hyderabad: A low credit score makes it difficult to take a loan or a credit card. Companies are looking at this score even while hiring. The 3-digit score sums up your financial standing and plays vital role in loan approval. Often, minor issues can dent your creditworthiness. What you need to do to keep your credit score high?
Immediately analyze the reasons if your score is considerably low. Sometimes small mistakes in your credit report can cause your score to go down. It can be corrected by contacting the rating agency. Applying for a loan even if you don't need it can damage your credit score. So, be cautious. Lenders generally consider applications with scores above 750. Take meticulous care. Your score is likely to drop further if you face loan rejections.
Get control over your debt to improve your credit rating. Take a close look at all your loans. Plan to pay off high interest loans and credit card bills faster. This gives some control over other debts. This will also make it easier to increase your score. One should keep credit card utilization ratio as low as possible. The card should not be used more than 30 to 40 percent of its credit limit.
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Timely payment of loan instalments and card bills should become a habit. This is one of the factors that will affect your score, positively or negatively. One late payment is enough to damage the score you have maintained all these years. Hence, take steps to avoid any gaps. Make sure all your credit card bill payments are paid directly from your bank account.
If you have too many zero-security loans, it will have a negative effect on the credit score. There should be a home loan and a loan against gold. This will make your score better. Modify the loan terms when the EMIs seem burdensome. The instalment amount can be reduced by increasing the loan tenure. This makes it possible to pay instalments without any hassles.
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Financial discipline is important. Don't apply for more than one loan at a time. Banks think you are desperate for loans. This way, your score will decrease every time you apply. When the score is low, it is better not to apply for new loans as much as possible.
Check your credit report regularly. This will enable you to correct any errors in the report immediately. If the score is affected due to non-payment of card bills, you can try to pay the amount at once. In case of any dispute, complaint should be made to the bank, card company and credit bureau.
