5 things you can do to improve your credit score

30 Apr 2022 by Team FinFIRST

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Your credit score reflects your financial health and credit worthiness. Here’s what you can do to improve your credit score

Just like your pathology reports are a reflection of your physical health, your credit score is a reflection of your financial health. Most banks, lenders, financial institutions now look at your credit score before approving loans or credit cards. For example, your IDFC FIRST Bank home loan eligibility will depend on your credit score. In India, CIBIL is one of the most widely accepted credit reports that computes your credit score. This score, however, keeps changing with time and financial practices. So, if you plan to apply for a credit card, buy a property or any consumer durable products on EMI, it may well be worth taking positive action that can improve your credit score.

1. Pay your EMI and credit card dues on time

Any delay on outstanding payments such as monthly instalments and credit card dues attracts interest and also lowers your credit score. One smart way to do this is to automate your bill payments. Enabling auto debit facility for credit card or EMI can help paying off your dues on time and help improve credit score.

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2. Avoid taking multiple loans simultaneously

Not only does this increase the EMI burden on you, it also increases the likelihood of missing an EMI payment or lead to delays in repayment which can send your credit score crashing. Successful repayment of a loan can help you gain a better credit score. It’s a better option to go in for a loan after you have repaid one instead of taking out multiple loans.

3. Review your credit score periodically

If you notice a dip in your credit score, figure out the reason for the dip and take corrective action immediately. With good credit and financial habits, you should see an improvement within a few months. If you notice any error in your credit report you can contact and update CIBIL or the credit rating agency.

Keep your EMI low, repay dues on time, monitor credit score regularly to take corrective action in a timely fashion.

4. Consider loan amount, interest rate, tenor etc. while opting for a loan

To keep the EMI burden low, you may opt for a longer term. If you think that the home loan interest rates are likely to go down in future, you may want to opt for a floating rate, if you think interest will go up, you may want a fixed rate. Consider the flexible terms and options of your loan that will make it easier for you to repay and keep up your credit score.

5. Monitor loans that you have co-signed or guaranteed for

Any default on these loans can impact your credit score. If there are any missed payments on these loans, it is possible that your credit score may be lowered.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.