Proper planning is essential for achieving financial success. A crucial part of this plan is improving your credit score. A good credit score makes getting loans at lower interest rates from financial institutions more accessible.
If you want to quickly obtain a loan, having a good CIBIL score is crucial. Most financial institutions check your CIBIL score before approving a loan. A score of more than 750 makes it easier to get loans. Many people use credit cards to increase their CIBIL scores.
Maintaining a good credit score is essential for various financial needs, such as taking out loans for business or real estate investments.
Improving your credit score can be beneficial in times of financial emergencies. It usually takes 3 to 4 months for banks and credit unions to report the latest activity related to your accounts to the credit bureaus, but you can check your credit score changes once a month.
Here are some tips to improve your credit score:
- Timely Payment of Bills: Pay your credit card bills and other EMIs on time; even one missed installment can affect your credit score.
- Error Detection: Regularly check your credit report for any errors related to your credit accounts.
- Tracking Credit Usage: Ensure your credit usage stays below 30% of your credit limit.
- Small Loans: Regularly taking and repaying small loans can help improve your credit score.
- Strategic Payments: To improve your CIBIL score, consider making multiple small payments throughout the month instead of paying your credit card bill all at once.
- Increase Credit Limit: Increasing your credit limit can improve your credit utilization ratio, positively impacting your credit score.
- Own Credit Card: Your credit card is essential to increasing your credit score as all your credit activity appears in your account.