What Factors Are Needed to Improve the Credit Score?
When it comes to applying for a loan, the significance of the credit score can’t be ruled out. It is especially when you are applying for an unsecured loan. Yes, lenders check the credit report as the first eligibility factor for the approval for the same.
If it is poor, then it means that you may default on the loan and your application is rejected. Lenders expect your cibil score to be 750 or more for approving the loan request.
But what are the factors that are needed to improve your cibil score? Let’s explore in this quick post!
- Payment history
Your payment history is one of the vital aspects of your credit report. If you have missed even one payment due date, then it may affect your credit report negatively. Thus, make sure you are repaying the ongoing loan and other EMIs to keep it high.
2. Credit utilization
If your credit utilization is higher, then your credit score could be poor. If you have used more than 30% of the total credit limit available on a credit card, then your credit score may be affected. Hence, ensure striking a balance between how much you use and pay it off soon to be ready for the next loan.
3. Credit history length
The older is your credit history; the better will be your credit report. The only requirement here is that you should repay the used credit for such an instrument. Hence, you should try to keep and use an older credit card and pay its bills on time. It can help you enjoy an improved credit score.
4. The mix of credits
Having secured and unsecured debts can help you improve your cibil score drastically. Thus, if you can maintain a mix of home loans, personal loans, credit card, student loan and more, then your credit report will continue to grow.
By considering these aspects, you can easily help your credit score to improve significantly.
