5 Ways to Improve Your Credit Score in Consumer Financing

Are you worried as your CIBIL score is very low as you have to take the help of consumer financing? If yes, then this article will help you to improve your credit score. That means through this article, you will learn how to improve your CIBIL score as it plays an essential role when any of the individuals apply for a credit card or a loan. 

 

Apart from that, a low CIBIL score can be very terrifying for individuals in urgent need of money, which can also affect their borrowings adversely. However, the credit score is one of the crucial individual financial health or consumer financing measures. The credit score tells the lender how responsibly you use your credit. Overall, better the score, it will be quite easier for the individual to get the loan approved. 

 

Moreover, a good credit score also opens the door to the lowest available interest rate on the borrowed amount. So, if you are the one who wants to improve your credit score, there are a number of simple tricks which you can do, no doubt it takes a bit of effort, but you can make your CIBIL score high.

 

What is considered a good credit score for consumer financing?

In India, many bureaus generate reports related to the CIBIL score of the individual. It ranges from 300 to 900. However, if the personal credit score is near 900, it is considered better. If it is between 300 to 549, it is poor, and if it is between 550 to 700, it is deemed fair. So, to improve the credit score, focus on factors that impact the credit score and take conscious measures to improve it. 

 

Let’s get started…..

 

Pay outstanding bills

If you want to improve your credit score a bit, you have to pay your outstanding bills like credit card bills or loans immediately. The reason is that payment history is one of the primary factors taken into consideration while calculating the credit score. That means if you own a history of delayed payments, then the credit score will be low and vice-versa. 

 

However, if you don't want your credit score to go down in the future, make sure to activate payment alerts or an auto-debit facility so that all your payments will get clear on time. Additionally, avoid paying the minimum amount due on a credit card so that the outstanding amount will be below.

 

Take the help of credit monitoring to track your progress

Credit monitoring services are one of the easy ways to check how your CIBIL score changes with time. These services are free of cost, which helps you monitor credit reports like paid-off accounts or any new account you have opened. 

 

In addition to that, many of the credit monitoring services also help the individual to identify thefts and fraud. 

 

Review your credit report

As a customer, you are entitled to one free credit report once a year from three report agencies, and if you request one, it will not impact your credit score. So, review each report very closely and dispute any of the errors if you find them. 

 

In this regard, one government report states that around 26% of the consumers have at least one potentially material error. They are in the form of misspelled names, addresses, and some errors are costlier like, accounts are incorrectly reported late or delinquent debts listed twice. 

 

Add rent payments to your credit report

If you are paying rent regularly, add those payments to the credit report to offer positive information to the credit bureaus. However, you can do this by signing up for a service like PayYourRent or RentTrack. 

 

Additionally, in many cases, if you get your landlord or property Management Company on board, it will limit the fees you are charged.

 

Avoid taking too much debt at one time

If you want to improve your credit score, the number of loans you will take in a fixed time should be minimum. That means if you really need money for some purpose, first repay one loan and then take another so that your credit score will not crash. 

 

However, if you take multiple loans at one given time, it shows that you are in an unforgiving cycle due to insufficient funds, which will make your credit score fall further. Moreover, if you repay one loan and then take another, it will surely boost your credit score. 

 

The bottom line

If one takes a loan frequently or wants to take a loan, improving your credit score is a good goal. The reason is credit score is one of the factors based on which lender will approve your loan amount. Apart from that, if you want to help the best credit repair companies improve your credit score, you can contact them. Overall, the main role that can make you successful is your efforts. 

 

So, best of luck!