Credit or CIBIL score is a numeric representation of an individual’s creditworthiness through which financial institutions gauge the risk they undertake while lending credits.
When an individual applies for a loan or a credit card, the lending institution conducts an investigation of his/her credit history before approving of the application. Ideally, an individual’s CIBIL score should always be above 750.
If your score is below 750, following are a few tips through which you can raise it effectively –
Make timely repayments
Paying your bills on time is the first prerequisite of maintaining a healthy credit score. Whether you have availed a loan or a credit card, it is crucial to make payments on time to avoid any negative repercussion on the CIBIL score.
In this regard, a loan app or a credit card app can help you track your due dates for payments.
Maintain a low credit utilisation ratio
Credit utilisation ratio refers to the credit utilised on an online credit card against the limit available on it. Experts recommend users to maintain less than 30% credit utilisation on their cards to increase their CIBIL score.
Avail mixed credits
Borrowers should maintain a mixture of secured and unsecured credits to increase their CIBIL score. Having a mix of credits allows individuals to reduce their dependency on any single advance or card.
To do this, one can apply for a loan easily from personal loan apps in lieu of depending solely on credit cards to finance various expenses.
Keep previous cards
When an individual avails the credit card apply online facilities for a new one, he/she typically foregoes old cards. It is, however, best to keep the old cards to build a substantial credit history, which reflects positively on the CIBIL score.
These are a few ways through which you can raise your CIBIL score before applying for a new loan or card through financial apps like the Bajaj Finserv app – Experia.
