Manage your credit card spends effectively to boost your CIBIL score
Last Updated : June 24, 2016, 12:05 p.m.
Your CIBIL score impacts loan approval. Higher score, better approval chances; lower score, higher rejection risk. Manage credit utilisation by spreading spending across cards to boost your score. Here we have tips for effective credit utilisation management, so manage your credit card spends effectively to boost your CIBIL score:
Manage your spends via credit cards
The best way to maintain an effective credit utilisation is by saying no to unnecessary spending via credit card. And if you have multiple credit cards, spread the spending over them to lower the credit utilisation.
Higher credit limit
Each credit card is given a certain credit limit during the time of the application. The credit limit is dependent on factors like your income, repayment capacity and others. More the income level and the repayment capacity, more will be the credit limit on the credit card. After you get the credit card , make sure you spend wisely and pay your credit card bills on time. Banks review your credit card bill payment history from time to time. And if your payment history remains good, then your lender can raise the credit limit on your credit card after a certain period. With higher credit limit and controlled spending, you can improve your credit utilisation significantly.
Smarter scheduling of payments
Smartly scheduling your credit card payments on a monthly basis manage your credit card spends effectively to boost your CIBIL score. If you feel you have used the card too much in a particular cycle, make the payment earlier than the due date. Also, you should avoid carrying forward the balance to the next billing cycle. The practice of carrying forward the balances of previous cycle leads to unnecessary consumption of your card’s credit limit.
Thus, it is clear that you can lower your credit utilization rate on credit card by spending wisely via the cashless instrument. Keep an eye on the monthly spends and don’t let them go out of your hand to pay the credit card bills on time and boost your CIBIL score .