How to improve your credit score? Know it from experts
Also Read: How can you avoid credit score scams? These are 7 key ways“A clean repayment history is the most crucial element for a good credit score," advices Sanjeet Dawar, Managing Director, CRIF High Mark. Plan and ensure timely payments of your Equated Monthly Instalments (EMIs) and at least the minimum payment due on your credit cards.The time of default also plays a vital role in the computation of a credit score.
Any recent defaults are considered more severe than the older ones. Therefore, in the event of default, you need to build a good credit repayment history post the default to improve your credit score over a period.
Also Read: A high CIBIL score offers 7 key advantages to borrowers“Repay your credit card outstanding (dues) fully as much as possible," says Ashish Tiwari, Chief Marketing Officer, Home Credit India.
In case in some months you are not able to pay fully, do ensure you pay the minimum amount due on time.Pay off the outstanding balance as soon as you have the funds. Large outstanding amounts on credit card or any revolving loan held for longer periods have a negative impact on your credit score as does over utilisation of the credit limit.One should never exhaust the limit of their credit card/ revolving credit lines.
Tiwari suggests that it is ideal to keep the average credit utilisation ratio around 50%. For example, if you have a credit card with a limit of ₹100,000, for a month if you have used ₹80,000, and next month you have used ₹20,000, your average utilisation is 50% for 2 months.
Also Read: Can you improve your credit score while unemployed? These are 7 steps to followPlease take care in the pace at which you are borrowing.
