Nowadays, people take credit cards, personal loans, and home loans when they need money. While giving a loan or a credit card, finance companies or banks first check your credit score. If the credit score is good, then you get a loan or a credit card. Now, if your credit score is bad, then you do not get a loan or a credit card.
Now, if your credit score has gone bad, then how can to improve it? Let us tell you about some ways through which you can strengthen your credit score.
What does a credit score mean?
A credit score is between 300 to 900. It is decided by looking at the credit history. A credit score between 550 to 700 is considered good. At the same time, a credit score between 700 to 900 is considered good. Let us know how to improve the credit score.
Why does a credit score go bad?
Many times, we do not pay the loan EMI or credit card bill on time. In such a situation, the credit score can be bad. However, the credit score can be improved over time.
How can you improve your credit score?
1- Pay the loan on time
If you pay the credit card or loan on time, then your credit score can be improved. In such a situation, pay the credit card bill and loan EMI without delay.
2- Use your credit card limit less
If you want to improve your credit score, then use your credit limit as little as possible. Always use less than 30 percent of the credit limit. Suppose your credit limit is Rs 10,000, then do not spend more than Rs 3,000.
3- Do not close the old credit card
The CIBIL score is determined by the credit history. The older the credit history, the better the credit score. In such a situation, if you have an old credit card, do not close it.
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4- Keep this in mind while applying for a new loan
Whenever you apply for a loan, your credit history is checked. When the credit history is checked repeatedly, it can affect the credit score.