Improve Your CIBIL Score in 2017
So, you’ve been a little erratic or even irresponsible with your credit cards usage this year, and your credit score has dipped. You have no clue what to do!
There’s always scope to atone for your mistakes in the coming year. Here’s what you need to do to get that perfect credit score in 2017 by changing your spending habits in the following 5 ways.
1. The Timely Payer Wins
If you have a habit of making bill payments late, make sure to change it in 2017. Most companies take a debtor’s payment history at 35% of his overall credit score.
That’s why when you make timely payments, you are actually taking the first and most important step for improving your credit score. For forgetful debtors, it is important to write down billing dates and score them off once they are paid.
Similarly, email or text alerts on the mobile phone also serve as timely reminders. Even instructing your bank to make the payments helps enormously and takes the load off your mind leads to a better credit score.
2. Reduce credit card balances
When you utilize credit in excess of 30% on the available limit on your card during the month, you actually damage the 30% of the score evolving from owed amounts. Gradually and steadily reducing the outstanding balances on all your cards and ensuring they are kept low shall induce higher creditworthiness.
3. Pay in Advance
You may always find solace in paying off all monthly credit card dues within the stipulated time. However, it pays to remember that the day in which you reduce your outstanding balance to zero may not necessarily be the day credit bureaus get the relevant reports pertaining to your account.
That’s why it always makes sense to pay off your card dues during the middle of the month while also keeping regular track on the balance to prevent it from touching the 30% threshold.
By making your payments in advance, you actually ensure that the credit utilization will remain low. It does not depend on the timing the credit card issuing company sends the relevant report to the appropriate credit bureau.
4. Yearly Check On The Credit Report
As a regular card user, it always pays to minutely review your credit report for discrepancies and errors on an annual basis. It is because errors pertaining to credit reporting are common and such incorrect or inaccurate information on the report could result in lower credit scores.
Check the reports given out by all accredited bureaus and any difference or discrepancy should be immediately taken up and rectified accordingly.
5. Think Twice About Credit Applications
Inquiries on new credit comprise 10% of the credit score. So, when you apply for new credit in large volumes, it signals financial trouble which makes your score drop. However, this doesn’t imply that you shouldn’t access fresh credit.
When applying for credit cards, wait for about three to six months before putting in a fresh application. It will make your score stay intact in the long run.
Maintaining the above habits gives you a favourable credit score and helps you with your financial reputation.
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