Loans are no more a taboo. It’s no way that people will look at you with strange face when you say that you have a loan. In similar manner, credit cards also are available easily compared to what they were a decade ago. With lot of data available on internet, and lots of information you get thorough blogs, credit score and credit report are a few known things. If not as concept but as words people are getting aware. So we can readily discuss the same.
You must have heard people around you speaking about their low cibil score. You must also have heard them talking about where did they go wrong which led them get their scores low! But, do you know if you have any credit score? How to determine? The answer is: one has credit score if he/she has taken any loans or credits from banks on non-banking financial institutions. This also includes the credit cards. Now the whole point is what if you are new to this? What if in bank’s or credit bureau’s language, you are a “No History” customer? How to build your credit score fresh?
Let’s look 6 amazing points which will help you to boost start you credit!
Credit cards are best way to start your credit history. It is also one of the fast ways to boost your credit. As they are not long term commitment of the repayments you have to make, it’s not a burden for years. If you are new to credit there can be a possibility that banks won’t give you normal credit card, in that case you can always go for secured credit cards. Banks will easily grant you a secured credit card as it is not a risk for them.
When you take a credit card, especially to improve cibil score or built your score, it does not mean that you utilize your entire limit and repay the whole amount again. To get your score best, utilize only 30% to 40% of your total credit limit and repay on time, i.e. whenever your payment is due. Do not miss a single payment. Within 6-8 months, you would increase you score with a great extent.
If you do not have a bank account which is too sustainable, open few new accounts. Few here does not mean many, it means 2 or maximum 3 where you can reflect regular cash-flow. The reason why you should not open too many accounts is: that if you open too many accounts, the banks and the bureaus think it as credit hungry behavior and may not help you in getting any credits.
Go for a small amount of loan which will not hamper your regular financial planning. Similar to the concept explained in credit cards, if you pay responsibly here, that will also help getting your score up.
It might be a case that you must not be given any loan all on your name as you do not have any credit score. In such cases, what can be done is to get a co-signer for you loan, so you can get a loan easily and then pay the EMIs on time so as to get a good score.
These 2 points also work a lot. You would keep on trying for your score to build or increase, but if you do not check your score periodically, how will you come to know if the scores have come up? Or you are going in perfect direction? It is advisable to check the credit score 2ce in a year. And do not miss on any payments. Pay responsibly to maintain your score.
You need to understand, that it is a slow process. Be patient, nothing happens overnight!
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