Rehma Kredi
RK is a respected credit advisory service operating nationwide in India, committed to aiding clients in attaining favorable credit standings and financial autonomy.
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HOW TO IMPROVE YOUR CREDIT SCORE?
There are at least five factors that can have an impact on your score.
- Your payment habits (35 per cent). By making frequent payments and paying before the due date, you can improve your score. But, contrary to what some banks suggest, don’t just pay the minimum, says Mr.Saradhi. “If possible, pay off the balance each month. You’ll sleep better at night.”
- Your credit usage (30 per cent). Do not use more than a third (up to 50 per cent at most) of your available credit. “If your card has a Rs.6,000 limit, don’t spend more than Rs.3,000,” explains Mr.Saradhi.
- Age of accounts (15 per cent). The older the account, the better idea lenders will have of your payment patterns. So, it can be helpful to keep a card that you’ve had for 20 years as long as there is no fee attached to it. Just make sure to maintain some activity on the card or other account—even if it’s just an automatic payment that is made every month. It’s also a good idea to make a withdrawal (on a line of credit, for example) every few months, even if you pay the money back right away. If you don’t make any transactions on these types of accounts, they’ll become inactive, usually within three to six months.
- Number and type of accounts receivable (10 per cent). It’s better to have a credit card, a mortgage, and a line of credit than to have three credit cards. Don’t get extensive n one product of the banks
- Number of applications made (10 per cent). Be careful not to apply for credit too often because every time you apply, your score goes down—even if the application doesn’t go through. “If your application is denied and your score isn’t very high, ask a credit counsellor in a not-for-profit organization to guide you, rather than going from one financial institution to another,” says Mrs.Saranya.
FOLLOW SOME KEY RULES OF THUMB
- Check your credit report regularly with the four main credit bureaus in India, TransUnion(CIBIL). Experian, CRIF Highmark and Equifax. The service is free and is often available directly. You can also get your credit report analyzed by our professional team.
- Make sure your file is error-free. If you find errors in your file, Please feel free to contact us and ask for resolution. Also note that not all lenders work with both credit bureaus, so it is best to check with each one.
- Don’t miss a payment. If you miss a payment date or make a late payment on your credit card even just once, it could affect your credit score. And if you miss two minimum payments in a row over a 12-month period, it could lead to an increase in the annual interest rate on your unsecured credit cards and lines of credit.
“A score of 750 is considered ‘excellent,’ so if you reach that level you shouldn’t worry too much—especially since your score changes all the time, depending on the transactions and refunds you make,”. Even so, always remember to use credit wisely. Financial institutions are always coming up with new types of cards and credit products, but that doesn’t mean you should accept every new offer that comes your way. “Credit is convenient, but there is always a price to pay,” says Mr Saradhi.
