CIBIL score or credit scores are a three-digit number playing a key role in an individual’s life. They are indicative of financial habits and provide several benefits to the owner. The range lies between 300 and 900, with a higher score increasing the owner’s advantages. But, the fewer scorers need not worry. The less scorers can improve their scores, while the high scores should work to maintain them. The individuals can further track their score through a free CBIL score check available at CIBIL Score App. Here is the guide to the same:
What Factors Affect Credit Health?
Multiple factors regulate credit health. The same has been tabulated for concise and precise awareness:
|Credit Utilization||Amount of credit utilized|
|Credit Exposure||Judging requirement of credit card|
|Defaulting||Number of default accounts and their period|
|Repaying Debt||It decreases credit scores on not paying a debt, eventually increases to an excessive amount|
|Credit Card||The number of times defaulted due to minimum balance payment.|
|Number of inquiries||Number of times applied for a loan or credit|
|EMIs||Timely payment of the loan|
|Trade attributes||The type and line of credit and dependency on credit card|
How to Improve Credit Score?
People with low credit scores can improve their credit scores, which are generally minimized due to careless financial handling or uncontrollable circumstances. Follow the mentioned points:
- Timely Payment
Customers must ensure timely payment of the EMIs. The inability to do so will lower their credit score and impose penalty fees, further affecting them financially.
- Customize Credit Limit
The credit Utilization Ratio also determines a credit score. Utilize only if necessary. Moreover, modify it according to the needs.
- Avoid Unnecessary Debts
Customers must properly manage the number of loans or debts at a time. Multiple debts indicate an inability to handle one’s finances and hold insufficient funds, making them a poor candidate for loan approval. In case of need, repay the first loan and then look for the next one.
- Choose Different Forms of Credit
Beginners must start smartly. They must take secured and unsecured loans with the proper balance of healthy credit mix to improve their credit.
- Use free CIBIL score check regularly
Wishfin provides the facility to perform free CIBIL score check. Users can utilize it to monitor their progress through CIBIL score App. It will guide the users to formulate a strategy and make decisions on the distribution of finances.
- Take long-tenure loans
Long-tenure loans are generally coupled with low EMIs. Individuals with low earnings or low budget can complete their needs without affecting their credit scores.
How to Preserve Credit Score?
Individuals owning high credit scores must take proper care of their maintenance. It does not require much effort and is similar to the previously mentioned one. Here are the steps to be followed:
- Monitor Credit Utilization Ratio
The customers must maintain the ratio to 30%. It will stabilize the credit score. The mentioned activities can be achieved by analysing the expenditure and controlling it. Furthermore, modify the credit limit if required.
- Check Loan Eligibility
The loan process requires hard inquiry, which impacts the credit score. Customers must work to minimize this by efficiently checking loan eligibility so the loan is not rejected. In case of rejection, the same process will be followed again, impacting the credit score.
- Keep Old Credit Cards
Customers must not discard old credit cards. They indicate old relations with banks, which can be considered an inability to maintain a credit score. Furthermore, successfully maintaining them will also contribute to good credit scores. Track the same through the CIBIL score app.
- Track Credit Score Regularly
Wishfin is the official partner of TransUnion. It ensures their credit scores are trustworthy and reliable. They also provide a free CIBIL score check for users to know the score. Moreover, the CIBIL score App by Wishfin allows tracking the progress, further helping the customers make financial decisions.
The credit score is an important thing requiring the attention of its users. It holds the potential to lower the interest rates on loans and increase the number of loan grants. However, to avail of the benefits, customers must improve and preserve their credit scores. The mentioned guide, coupled with a free CIBIL score check through the CIBIL score App, will help the users to wisely handle their money and take smart decisions.