- Eyeing a hassle-free loan approval? Maintain a Good Credit History to experience the same!
- Read here how you can ensure a good history and get credits easily and at attractive terms
Your credit history will determine whether or not your loan or credit card application is approved. Not only does your credit history reveal your credit score, but it also reveals your payback history. A credit score of 750 or more is considered good and nearly guarantees you the credit you desire. The word credit score is nothing but a reflection of creditworthiness. So, whatever credit you have, handle it effectively and maintain a solid credit history to obtain credit quickly and in favourable conditions. We can direct you in the right direction. Let’s take a look at this article for some tips to make good credit history tips.
- Looking for quick loan approval? Maintain a positive credit history to get the benefits!
- Learn how to maintain a solid credit history and obtain credit quickly and in favourable conditions
Before approving a new credit line, lenders look at both. Credits such as home loans, require a credit score to get approval. Also, the interest rate on a loan is determined by your credit score and repayment history. Your interest rate will be cheaper if your credit score is greater, and vice versa.
The Most Essential factors that Affect a Credit Score
To establish credit score ratings, credit bureaus use four main factors. The number of credit inquiries, payback history, existing loan and credit use, kind and tenure of loan, and repayment history is all things to look into. When creating a credit score, payment history, debts, and utilization of credit always receive the greatest weight.
How to Raise Credit Score
The simple truth for good credit history is a flawless payback track, which includes regular debt payments, optimal credit use, and applying for credit with discretion, among other things. Here, we’ll discuss them in more detail. Let’s continue reading and do the necessary credit measures to maintain a good credit history.
How Does Making On-Time Payments Help Improve Credit Score?
The settlement of debts equates to roughly 30 percent of your credit score. As a result, if you pay your loan and/or credit card bills on time, you will have an excellent credit history. Determine your objectives and budget carefully to ensure that you have enough money to pay off your loan or credit card. If you have several debts, you’ll need to examine your spending habits and remove those that aren’t required. This will assist you in paying off all of your bills on schedule and maintaining a positive credit history.
The Key to Good Credit History is Optimal Credit Use
People who use credit cards should be aware of the significance of a good credit usage ratio. A usage ratio of approximately 30% or less is regarded as ideal. If your credit card limit is INR 1 lakh, you should not exceed INR 30,000 in a month. However, many people may have a monthly income of INR 30,000 or less. In that situation, credit card spending should plummet in the long run. As a result, you should use your credit card for about 5-15 percent of your income. That way, you’ll be able to pay your credit card payment on time and build a positive credit history.
Despite Rejections, Don’t Apply for Credit
Despite being repeatedly rejected, don’t seek credit in a flurry. Lenders pull your credit report from CIBIL when you apply to verify your credit score and payback history. This is known as a hard credit inquiry, and it can significantly lower your credit score if rejections occur. So, rather than applying, you should examine your credit record to see why you were turned down. Work on them, raise your credit score and then apply. In contrast to when you keep applying despite denials, this will have a negative influence on your credit record.
Credit History Benefits from a Balanced Credit Mix
Continue not only to apply for unsecured credit because it does not contribute to a healthy credit mix. It’s best to have a mix of secured and unsecured loans, however, the payment of these debts will have the most influence on your credit score. However, if you fail on any of your unsecured loans, your credit score will suffer quickly. This might harm your credit score. Make sure you have a solid credit mix to avoid such unfavourable credit occurrences.
Apply for the Credit When Required Urgently
When you’re in a panic and your funds aren’t enough to cover your needs, apply for a loan or a credit card. Also, based on your savings, carefully consider the loan amount. This will reduce your financial burden, assist you in making timely payments, and help you maintain a positive credit history.
A Good CIBIL Score Provides a Number of Advantages
A consistent good CIBIL score can assist you in saving money and simplifying your financial life.
- If you have a good credit score, you will nearly always be able to get the best interest rates and pay the least amount of financing costs on credit card balances and loans.
- When you have an excellent credit score, your chances of acquiring credit improve. Overall, you may apply for a loan or a credit card with confidence.
- If you have a high credit score, you will be able to receive cheaper interest rates on credit cards and loans. If you need more negotiating power, you may take advantage of tempting offers made by other firms depending on your credit score.