Improve CIBIL / Credit Score Ganesh Capfin
What Makes Your Credit Score Go Down?
It is understood that having high balances on your credit cards can significantly reduce your credit score. Apart from that, there are several other factors that can hurt your credit score:
- Being late on your credit payments.
- Completely ignoring your loan dues/credit card bills.
- Lenders use third-party debt collectors to retrieve the loan amount from you, in case they do not receive payments. Having your account sent to collections reflects very poorly on your credit score.
- Filing for bankruptcy can have a devastating effect on your credit score.
- When you request to close a credit card that has an outstanding balance, your credit limit drops to Rs.0. This is similar to a situation where you have maxed out your credit card.
- Closing old credit cards shortens your credit history. This has a negative impact on your credit score.
- Applying for multiple credit cards or loans within a short duration makes your credit score plunge. Hence, it is advisable to limit the number of applications.
- Having only one type of credit account will negatively impact your credit score. So, you should look to maintain a mix of loans and credit card debts and make consistent payments on time.
- If you fail to check your credit report occasionally and fix errors, if any, your credit score can be hurt. It should be understood that credit reporting bureaus also make mistakes while creating credit reports. If you do not monitor and correct your report, it may cost you a lot in the future.
Why is cashchahiye wants to help me in improving my credit / cibil score ?
Cashchahiye feels that you should always be in complete command of your personal finances. In order to help you with this goal, we have made provisions for you to help you in improving your credit score . Knowing your Credit Score before applying for a loan can help greatly.
If you have a good score, you can be rest assured that your loan or Credit Card application will be processed without any hassle. You can even leverage a good score to ask your lender bank for better rates of interest and additional benefits. On the other hand, seeking credit with a poor score will further lower your score. Let’s not even imagine getting approval for a credit line. Hence, check your Credit Score before you apply for a financial product. Work up the score if it’s not in the acceptable range.
TIP: Credit agencies review and renew your score every few months. If you have a poor Credit Score, start managing your money wisely and pay your dues on time for a good few months. Credit agencies will reward you by boosting your score.
Simple steps to improve and maintain your credit score :
So follow the tips and measures mentioned below to start laying the foundation of a good credit score and an error free credit report:
- Ensure your pay your credit card bills and loan EMIs on time
- Do not apply for multiple loans and credit cards simultaneously
- Check your credit report for mistakes periodically and get them corrected if required
- Keep your credit utilization ratio lower than 30-40% mark across all credit cards.
- Ensure that you do not have multiple outstanding unsecured loans or credit cards.
Among the above, the main reason why many people have a low credit score is due to late payments of loan EMIs and credit card bills. It is easy to avoid late payments via timely checking your payment reminders and through following disciplined monthly installment routine. The other common reasons, such as a high credit card utilization ratio and multiple outstanding loans are usually the result of lifestyle inflation, which is also avoidable through careful financial planning.