In a recent study conducted by an independent think-tank, it was found that more than 60% of the general population has cognizance of the fact that a better credit score dramatically improves their chances of getting their loan approved. However, of this only 15 % know their credit rating. The study also concluded that a staggering 85% of the population carries a credit score of less than 800.
So What is a Credit Score?
It is a three-digit score that helps determine the creditworthiness of an individual and ranges between 300-900. Ideally, the score should hover around 750. Although if it is higher than this, then it would be better. If you are responsible with your finances, including paying your credit card bills and loan installments on time, then it can greatly help in bettering your credit score.
A good credit score betters your eligibility and thereby increases your chances of getting a loan. Lenders including financial institutions are more likely to offer you a loan if your credit score is higher. Also, you can negotiate on the interest rates especially when applying for a personal loan.
Having considered the importance of maintaining a good credit score, here are some of the top tips to better your credit score -
1) Using Cards Judiciously
According to financial experts, you should keep the credit utilization less than 30% to better your ratings. Also, you stick to using a maximum of 2 credit card. In case you have multiple card dues, then you should use a personal loan to consolidate all your debts.
2) Repaying Old Debts
You must repay all your existing dues on time to demonstrate to your potential lender that you are responsible when it comes to handling finances. Also, paying your interest on a timely basis betters your credit score.
3) Not Missing Payment
One of the best ways of improving your credit score is to pay your bills on time. This improves your credit score and proves to lenders that you are financially responsible.
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