Boost Your Credit Score: Essential Tips for Financial Success
Remember the memorable moment on Shark Tank India when Priyasha Saluja impressed the judges with her impressive credit score? Not only did her claim spark laughter and admiration, but one of the judges, Aman Gupta, even attributed his final offer to her stellar score of 838.
A solid credit score can unlock numerous opportunities, even if you’re not vying for a spot on Shark Tank India’s stage.
So, it’s crucial to leave no stone unturned and adhere to the rules diligently to see tangible results over time.
“Building and enhancing your credit score usually takes a minimum of six to nine months,” advises Rakshit Agarwal, Co-founder of Rupicard.
Your credit score serves as a clear indicator of your creditworthiness. “A good credit score grants you access to various financial products, such as credit cards, personal loans, home loans, and vehicle financing, at more favorable interest rates,” explains Sajish Pillai, Managing Director and Head of Assets and Strategic Alliances at DBS Bank India.
Here are some key strategies to give your credit score a boost:
1. Timely Payments: Ensure you pay your credit card bills and loan EMIs promptly. A missed payment can significantly impact your credit score.
“Making timely payments is crucial for maintaining a good credit score. Be diligent in paying all your bills, including credit card bills, loan EMIs, utility bills, and other recurring financial obligations, on time. Even a single late payment can have adverse effects on your credit score,” emphasizes Sajish.
2. Loan Application Gap: Avoid applying for multiple loans in quick succession. It’s advisable to maintain a gap between loan applications to prevent frequent credit score reviews by lenders, which can lower your score.
3. Regular Credit Report Reviews: Periodically review your credit report to monitor your credit score. Identify areas for improvement if your score is low.
4. Credit Card Usage: While not mandatory, having a credit card can positively impact your credit score. Consider applying for a secured credit card to build or improve your credit history.
“A beneficial option for individuals with limited credit history is secured credit cards backed by fixed deposits. These cards are accessible to individuals from all backgrounds, as they require a security deposit that typically determines your credit limit,” suggests Rakshit.
5. Credit Utilization Ratio (CUR): Keep your credit utilization ratio low by using only a small portion of your available credit. For example, if your credit card has a maximum limit of ₹5 lakh, avoid maxing out the entire limit.
Maintaining a healthy credit score is essential for accessing financial opportunities and securing favorable terms on loans and credit cards. By following these tips, you can take proactive steps to boost your creditworthiness and achieve your financial goals.
