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It’s common knowledge that all lenders check your CIBIL score, widely known as credit score, before approving your loan application. So it’s inventible to improve your credit score if you want to apply for a loan. This article tells you how to do that. But first of all, let’s understand what a credit score is!
A credit score is a three-digit number determined by your previous and present credit activity and provided by one of the credit bureaus. This can be between 300 and 900. Higher scores indicate tendencies in responsible credit conduct.
Many NBFCs and personal loan apps also provide personal loans to people with low credit scores. However, you shouldn’t let that stop you from raising your credit score.
7 Tips on How to Quickly Improve Your Credit Score
Some advantages of maintaining a good credit score are swift credit approvals, negotiating leverage with lenders, lower interest rates, and the likelihood of receiving a long-term loan. Is that music to your ears? Then, let’s take you through these 7 proven and practical tips to improve your credit score:-
Check Your Credit Report
The first step to improving your credit score is to check your credit report. This report will provide insight into any errors that may be impacting your score and any areas you can improve on. You can request a free copy of your credit report from the credit bureaus.
You can also consider using a credit repair company to help improve your credit score. One such company with a good track record is DisputeBee. To learn more about this company, you can read detailed DisputeBee reviews.
Repay Credit Card Dues on Time
One of the easiest ways to improve your credit score quickly is to pay your credit card dues are paid on time. Late payments can dramatically impact your credit score, so make sure that you are making your payments on time.
Limit Credit Utilization
Another critical factor that can affect your credit score is your credit utilization. It is the ratio of your total credit card balances to your total credit limits. The ideal credit utilization ratio is 30% or less. So, if you want to improve your credit score quickly, make sure that you limit your credit utilization.
Opt for Different Types of Credit
Having diverse types of credit can also help improve your credit score quickly. This means opening different accounts, such as a personal loan, a car loan, and a credit card. Having different types of credit gives lenders more assurance that you can handle different types of debt.
Opt for a Longer Tenure
When it comes to loans and credit cards, longer tenure is usually beneficial for your credit score. This is because it shows lenders that you are able to manage your debt over a longer time.
Be Prudent While Applying for Credit Cards
When you apply for a new credit card, it will show up on your credit report as an inquiry. Too many inquiries can negatively affect your credit score. So, if you want to improve your credit score quickly, be 100% sure that you want that card, and you can pass this inquiry.
Don’t Apply for Multiple New Credit Lines
Finally, applying for multiple new credit lines at once is a sure way to damage your credit score quickly. So, one of the significant answers to the question of how to improve your credit score is not applying for multiple new credit lines.
Improving your credit score can be a tedious process. But the work and dedication it takes are all worth it. You can take any credit and personal loan online on legitimate terms with a healthy credit score. By following these 7 tips, you can make a big difference in a shorter amount of time. Start today, and you’ll see your credit score improve before you know it. Good luck!