Even if you make timely payments, your credit score might need improvement. It is influenced by a key factor called the Credit Utilization Ratio (CUR), which is the amount of credit you use compared to the total credit available.
For example, if your credit card limit is Rs.1 lakh, ensure your usage is within Rs.30 thousand to avoid lowering your credit score.
One effective strategy for improving your credit score is diversifying your loans based on your income limit.
This means having a mix of credit cards, personal loans, home loans, or other mortgage loans in your name, which can positively impact your credit score.
Submitting multiple credit card applications quickly can negatively impact your credit score.
Be cautious when applying for bank loans as a co-applicant, as the failure of the primary borrower to make timely payments can affect your credit score and increase your debt-to-income ratio.
Regularly checking your credit reports for errors and mistakes is crucial for improving your credit score.
Consult an expert if your credit score is decreasing to identify the reasons and seek advice on correcting any mistakes. Making timely payments is essential for improving your credit score.