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Why A Responsible Credit Attitude Is Vital For Financial Freedom

Why A Responsible Credit Attitude Is Vital For Financial Freedom
Viveka Rao
Written by Viveka Rao

Being Responsible and Informed Takes Your Credit A Long Way

What's The Highest Possible CIBIL Score?Independence is not only about your general responsibility to guard and sustain your life, but it also refers to be caring and diligent. The same goes for your financial independence as well as your personal independence.

Although, today you can easily get approved for credit cards and loans for your individual goals in life, it was not long ago that getting a loan approved was one of the most extraordinary financial achievements for us Indians.

Today is the age of instant credit card and loan approvals. Now, you can access all your financial details with just a click of a button and that too from wherever you want to. Moreover, now you can get home loans in just a few days of applying. Personal loans and credit cards can be availed instantly.

Things Are Changing

So, what is the reason behind this change from the former times? How do banks now lend more confidently and aggressively in the Indian market? How can people access loans more conveniently and faster now than before?

There are various factors that are behind this growth. The major one among these is getting timely credit details of the credit history of the borrower. This has given a lending confidence to credit institutions and banks.

CIBIL is the primary bureau, which has developed the basic Indian credit infrastructure and is mainly responsible behind this growth and giving access to consumers to a wide range of credit opportunities. A high CIBIL score and a healthy credit report provides customers financial independence, as now they can access credit easily as well as quickly.

And, a healthy CIBIL score is only possible, when you have a responsible credit attitude. This eventually leads you to financial freedom. Although, with a good CIBIL score you get easy access to the various credit opportunities, it is vital that you must exercise due diligence and maintain financial discipline in order to sustain your financial freedom. This is why it is crucial to pay your credit card and loan dues regularly and responsibly in order to build a high credit score.

So, now that you know why responsible credit attitude is vital for financial freedom, you must be wondering how you can get a high credit score, so that you can remain financially free today as well as in future. We have jot down some tips, which can help you to build and maintain a high CIBIL score.

1. Pay all your dues on time

You must pay all of your dues on time, whether they are the EMIs of your loans, your credit card bills, etc. Pay them till the due date of each month and you can be rest assured that your credit score will not be negatively affected. Your CIBIL report records your payment history and when you make regular payments of your credit card bills and EMIs, you can build a healthy credit report and a high CIBIL score.

2. Control your credit card limits

If your credit card spending increases, it will not affect your credit score in a negative way. However, if your current credit balance increases over time, then it will definitely have a negative effect on your CIBIL score. This is because increased current balance indicates increased repayment burden. Therefore, it is advisable to not utilize extra credit.

3. Limit your credit exposure

The total number of debt you owe is shown on your credit report and also affects your CIBIL score. Debts can include credit cards or loans and if you have too many of them, then it can increase your total debt amount and credit exposure, which in turn can negatively affect your credit score. So, if you have taken several loans, make sure that you close few of them in order to reduce your total credit exposure and then only apply for fresh loans.

Remember that responsible credit attitude is vital for financial freedom. And to enjoy easy access to credit and financial freedom, you must be responsible and diligent with your credit habits.

About the author

Viveka Rao

Viveka Rao

Viveka Rao is post grad in finance and a freelance writer here at CreditSmart. A love for shopping and travel rewards has fueled her interest in personal credit, and making the most of rewards programs. She writes to educate other consumers in making great financial choices.

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