In today’s era, your credit score has become your financial identity. If this score falls, then taking a loan or getting a credit card – everything becomes difficult. But there is no need to panic. By adopting some easy financial tips and the right habits mentioned here, you can significantly improve your credit score in just a few months. This article will provide you with powerful tools to strengthen your financial future.
Timely payment
Your payment history, i.e., the habit of paying bills on time, affects your credit score the most. A delay in even a single payment can harm your score. Therefore, you must repay the EMI of all credit cards and loans on time. For this, you can opt for auto-debit so that no payment is missed. This discipline will take your score up rapidly.
Use the credit limit wisely
It is better to keep the credit utilization ratio low. This ratio means how much of your credit limit you are using! Keeping this ratio low improves the score. If you often spend very close to the limit, it shows your dependence on debt. So, try to use less than 30% of your total credit limit. However, if needed, you can request a credit limit increase. This is an important part of smart financial management.
Avoid new credit applications
Whenever you apply for a new loan or credit card, there is a hard inquiry which can hurt the score a bit. If you apply frequently, the bank will think you are in financial trouble. So, take new credit only when really needed and manage existing accounts well. This shows your seriousness towards your financial health.
Check your credit report regularly
Sometimes your credit report may have errors, which lower the score even without your fault. So, check your report at least once a year. You can get a free report from CIBIL, Experian, or CRIF High Mark. If there is an error, immediately contact the concerned bureau and get it corrected. This is an important step to protect your credit score.
Maintain the ‘right’ balance in terms of loans
Your credit profile becomes strong only when it includes secured loans like home loans and unsecured loans like personal loans in a balanced manner. Along with timely payments and proper utilisation of the balance, it also helps in improving the score. It is proof of your financial prudence.