Using Credit Card to Build CIBIL Score: Things to Remember - Loan Trivia

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Thursday, 26 July 2018

Using Credit Card to Build CIBIL Score: Things to Remember

Using a credit card to build credit score has become a common practice. Maybe this is why the demand for credit cards on a global level has increased by a massive percentage in the last couple of years. People are becoming more conscious of their CIBIL score and its impact on their loan application, and thus, they are adopting all means to improve their credit score. On that note, if you are someone who is planning to apply for a credit card and use it for the purpose of improving your CIBIL score, below are a few things you must remember.

Credit Card - Bajaj Finserv

Treat your credit card as a debit card 

The only difference between a credit card and a debit card is when you use a debit card you are always aware of your limit. Even if you are not aware of your limit, you won’t be able to exceed the limit of your debit cards, unlike credit cards. So, treat your credit card as a debit card and always allocate a budget while using a debit card for shopping. 

Don’t exploit your credit limit

Don’t take your credit card for granted. Irrespective of your credit limit, refrain from using more than 40% of your limit. No! This is not a question on your repayment abilities or your income level, using more than 40% of your credit card’s limit takes a toll on your CIBIL score. Hence, use your credit card smartly and avoid using it recklessly.

Pay on time and on full 

Lastly, using a credit for improving CIBIL score only works out if you pay the outstanding balance/ credit card dues on time and in full. Remember, every small or big financial mistake that you commit is recorded by credit rating agencies and reflects in your credit history for a very long time. Hence, pay your dues on time and in full. 


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