Having a good credit score is crucial as it tells a lot about you. Your credit score is calculated based on your financial history, credit transactions, and other money-related activities. Thus banks and digital lending platforms check the credit score of the loan applicant to see if they are creditworthy or not. If you want to have a high credit score, here are some tips that can help you boost it.
Check out these tips that can help you maintain a good credit score
● Payment of bills before the due date: During the calculation of your credit score, the payment details of your bills and existing loan payments are scrutinized. If you pay the full amount before their due date, you will have a higher chance to get a good credit score. On the other hand, if you default or make late payments, your credit score can get negatively affected. Thus if you are looking to get loans from banks and digital lending platforms in the future, pay your bills and EMIs on time.
● Use less than thirty percent of your credit limit: Many people get credit cards for convenience when they become employed. While having multiple credit cards is not a bad thing, you have to keep your credit usage limit low. The ideal threshold is thirty percent of your total credit limit on the credit card. Keep your spending below this level and you will have a good credit score. If your expenditure is a lot high, banks and digital lending platforms will consider you as a credit risk in the future loan underwriting mortgage process.
● Keep your old credit cards open: Your old credit cards have a huge say in the calculation of your credit score. Thus never close your old credit cards without any reason because once you do so, all your credit history on that card will not be considered during the credit score calculation. This can lower your credit score and adversely affect your loan underwriting mortgage process in the future.
● Do not apply for credit inquiries needlessly: One way that can lower an individual's credit score is by making a lot of credit inquiries. When you apply for too many credit cards in a short period, it puts a bad mark on your credit history. This can negatively affect your credit score calculation. Moreover, the banks and digital lenders will also see it as a credit risk activity that can further lower your chances of getting loans in the future.
● Remember to check your credit report: Your credit report provides a detailed analysis of your credit history and any fault that is found here can lower your credit score. You should check your credit report regularly so that you can correct any discrepancies in the report as soon as you find them.
These are some ways that can help you to have a good credit score. Follow them so that you have a higher chance of getting a loan from banks and digital lenders.
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