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In the latest monetary policy meet held on March 24-27 2020, the RBI has decided to give a 3-month moratorium period for all outstanding loans as on March 1, 2020. Remember, this is not an EMI WAIVER. The move is in line with the economic pressures induced by the Coronavirus outbreak. So, this could mean some savings for you on your loan and help you deal with the likely situation of less or no income. Your credit score will not reduce if you don't pay the EMI. But doing so can raise your interest liability as banks would like to cover their losses, which is likely to be the case on deferred EMI payments, by increasing the interest component of the EMI after the moratorium period gets over. So, if you have the money, keep paying to reduce your interest liability. The moratorium, which was ending on May 31, 2020, has been extended till August 31, 2020.
India’s constitution came into effect on Republic Day, January 26, 1950 which gave us the power to choose our own government. On this remarkable day, how about the idea of giving your credit score a boost to make it suitable for best deals? According to a recent survey from National Foundation for Credit Counselling, as mentioned in Forbes, the percentage of people who get embarrassed while sharing their credit score is almost two and a half times more than those who avoid talking about their weight. While taking care of the health or diet needs dedication and discipline; you can improve your credit score very easily.
Tips to Improve Your Credit Score
To help you, we have brought the conglomeration of the finest measures to improve your credit score. You may read these below:
- Pay on time– Even if you pay the bill a few days later, it does not lessen its bad impact on your credit score. So, make sure you pay your credit card bills or EMIs on time.
- Do not go with the flow– When it comes to a credit facility, never get allured by the offers and end up stuffing your wallet with credit cards you don’t even need.
- Spend within the Credit Limit (half)– It is true that you have the right to use 100% of the credit limit, however, spending more than 50% reduces your credit score.
- Or, increase it– While using a credit card for some time, if you feel that your expenses have increased, you can request your bank to increase your credit limit.
- Apply for a credit facility– There is no doubt that people with no credit history can get loans or credit cards, but best deals are always out of their reach. So, get any credit facility to build your credit score.
- Check Your Credit Report– Checking your credit report would help you know the status of your score and payment records. To get your credit report for free, CIBIL and Experian are amongst the top choices.
- Set-up Payment Reminders– If you find it difficult to remember the last date of payment, which is quite normal, you can activate a reminder email or SMS from your bank. You may also opt for automatic payment deductions from your account.
- Clear Debts as soon as possible– Saying that you would do your payment is different than actually do it. Force yourself to get rid of the whole debt you owe to reduce the burden of late payment charges and interest rates. It would help not only in keeping your credit score safe but would also enhance it.
- Running away won’t help– The moment you think of closing all your credit accounts, to avoid paying the bills, remind yourself that the defaults are going to be visible in your credit report for seven years. Thus, it is better to avoid such things and try to improve.
Can you get a loan with bad credit score?
If you think that bad credit score is the end of the world, you are obviously overthinking. Loans or any credit facility is given by lenders by keeping into account some aspects. In the case of loans, below are the factors that are considered by the lenders for loan applications.
- How much is your net income
- Whether you have savings/investments
- What is your educational background
- Your current and past payment record and online expenditure
- In case you have a relationship with the lender
With Great Power comes Great Responsibility. The word of wisdom from our end would be that the real joy in exercising the power is to use it wisely only then it’s said to be legitimate. In order to get the best credit facilities, you must make sure that you have a powerful credit score which you should maintain forever.