Most of the people use a credit card nowadays. A credit score is a 3-digit numerical representation of your financial profile or status. The credit score of the card is ranging between 300 and 900 value. This figure value gives the lenders an indicator of your ability to repay the loan. Generally, a credit score of around 750 allows you to avail of a loan without any hassles or issue, as it signifies you have experience with credit and have been dedicated to repayment in the past. A credit score basically takes sometimes to build. It is around 18 and 36 months. But the question is that is it easy to achieve this credit value nowadays? The answer is Yes! Achieving this figure today is easier than ever. Advancements in technology allow you to avail of financing with a few clicks and manage your accounts through apps like a credit card app.
Basically a credit score is a numerical presentation which is based on a person’s financial credit analysis or we can say that it presents the creditworthiness of an individual. A credit score is primarily based on a credit report, information typically sourced from credit bureaus (a data collection agency). The credit scores are depends upon the things like how you make payments on time or not, how you use your credit card and how many accounts you have, how many accounts have own are in good standing. Some of the people believe that it also depends upon the factors like personal information i.e, gender, religion, marital status or national origin and much more. It is absolutely wrong. There are different factors which are used to calculate the credit score of a person. Have a look on the mentioned below factors for an idea.
Factors to calculate credit scores are as follows:
- Payment history of a person.
- Types of credit you have.
- What is your credit limits?
- The amount of your debt.
Loan apps are the solution to all the credit score issues. Online apps put powerful financial features at your fingertips, improving your credit score requires discipline, foresight, and a sound plan. With the help of instant loan apps, one can manage the score in just a few clicks.
Techniques To Improve Credit Score
To help you boost your financial profile, here are 5 simple tips to improve your credit score in 2019.
- Automate Emi And Credit Card Bill Payments
Your payment history comprises around 30% of your credit score and defaults in loan EMIs or delays in credit card bill payments impact your score negatively. That said, loan and credit card apps like Bajaj Finserv’s Experia app,allow you to automate EMIs and thereby ensure that you never miss a payment.
Similarly, peruse through the online credit card bill payment facilities and opt for automatic bill payments. While you can choose to pay the minimum amount, it’s best that you pay the bill in full. This saves you from having to deal with high levels of debt in the future and keeps your credit score healthy.
- Fix Errors In Your Credit Report
At times it is possible that your credit report may contain errors. Since your credit score is based on your report, it’s vital that you get them corrected. For example, your report may display the payment status of bills and EMIs incorrectly. Noticing and fixing these errors becomes easier with a loan and credit card app like Experia as you can track present and manage past borrowings easily.
- Keep Your Credit Utilisation Ratio Low
Another major factor that bureaus like CIBIL evaluate is your credit utilization ratio. This is a measure of revolving credit you have used to the amount you have. Generally, it is advised that you keep this ratio below 40%, ideally around the 30% mark. So, if your credit limit is Rs.1 lakh, use only up to Rs.30,000 to keep your ratio within 30%. A low utilization ratio shows that you do not credit hungry and is an indicator of your creditworthiness.
- Close And Don’t Just Settle Old Loans
A loan is said to be settled when your lender accepts a repayment amount that is less than the original amount you owed. This gets reflected in your credit report. The ‘settled’ status can cause your score to drop as it showcases an inability to make repayments. The alternative is to plan for repayment early and pay off the entire loan amount. Your loan account status will then reflect as ‘closed’ and your credit score will increase.
- Maintain A Healthy Credit Mix
One fourth, or 25%, of your credit score, comprises your credit type and duration. As such, it’s best that you have a mix of both secured and unsecured loans. If you already have a home loan or an auto loan, consider an unsecured loan like a personal loan as your next source of financing. However, when seeking a loan, do not make multiple instant loan app all at once. This is because every hard inquiry made by a lender shaves off 3 to 4 points from your credit score. Many applications made in a short time frame can this cause your score to dip undesirably.
An alternative to applying directly is to obtain a loan through pre-approved offers providing by the different lending/ financial institutions. For example, Bajaj Finserv’s loan and credit card app Experia has a pre-approved offer section that offers customized deals on financial solutions ranging from personal loans to home loans and loans against property. Customers get various types of offers. If you’re looking to get a credit card, apply online via the Bajaj Finserv app and make the most of the features of theBajaj Finserv RBL Bank SuperCard, which can help you save up to Rs.55,000 annually.
Having seen how you can improve your credit score, download Experia from Google Play or the App Store today to take further control of your finances. Implement these 5 tips and see your credit score grow steadily through 2019!