Credit Score Tips: Not getting a loan due to a bad credit score, try these 5 methods..
If your home or car loan application is rejected by the bank citing a bad credit score, then there is no need to worry. You can take your credit score beyond 750 by following some easy steps in financial transactions.
According to financial experts, the most important thing to improve a bad credit score is discipline. First of all one has to become financially disciplined. He will have to develop the habit of paying credit bills, loan EMIs, and other liabilities on time. By doing this he can easily improve his bad credit score.
What are credit scores: It is a number between 300-900 points given by credit bureaus. With a good score, the loan borrower is less likely to default. If your credit score is between 700 to 750, then you can get a loan from the bank at a competitive interest rate. According to CIBIL, only 10 percent of all loans sanctioned fall in this category. Whereas if your score is between 750 to 799 then you will not face much difficulty in taking the loan. If the credit score is more than 800 then it is considered excellent.
You can improve your credit score through these measures-
1. Never carry large amounts of credit card outstanding. This is because if you max out the credit card limit, you will be seen as someone unable to manage his debt. This will hurt your credit score.
2. Minimize credit card usage online or in malls. This will help you reduce your debt burden faster. Do not carry credit cards with you all the time. This will reduce expenses.
3. The EMI burden should not exceed 50% of the income. This will make it easier to manage debt.
4. Automate the payment of utility bills as missing them can affect your credit score.
5. Enroll for a credit monitoring service. This can help improve your credit report and also assist you if you become a victim of identity theft.
Eliminate debt, not compromise-
Credit history mentions whether you have repaid or settled old loans. If you have settled, it means the lender’s risk increases. This spoils your credit score. If you have repaid the bank loan on time then it will be easy to get the loan.
