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Taking on your credit problems by their horns

People need a little help with money from time to time; sometimes the reasons are serious and sometimes frivolous. But the undisputed fact remains that monetary stability can be considered completed only when there is an adequate bank balance PLUS the ability to borrow money when required. A person faces a lot of anguish, embarrassment and anxiety when he/she realises that the option to get any form of loan or credit is lost to them. Drastic measures may be taken; people making fraudulent claims of quick recovery from poor credit scores benefit from the mess, but the person facing the problems may still not be able to find adequate solutions. For such people, here are a few tips for you to try to improve your credit scores.

Finance

1. Reduce your credit card balances – Not many people know this but just because you have a large credit limit, it does not imply you can spend all of it and then pay the money back at your convenience. A credit card balance of more than 30% of the total credit limit at any given time is a strict no-no.

2. Taking traditional loans – The type of credit you take also makes a difference. So, instead of taking a personal loan to improve the condition of your home or make repairs, take a proper home or home improvement loan. You will see that they have more of a positive effect on your scores than the personal loans and credit card usage do.

3.Check your credit report – You have every right and an obligation to know what your score is, periodically. As your payment history gets recorded every month by your bank and reported to CIBIL, there are gradual changes that take place to your credit score too. Make sure you obtain a report at least once a year to track the changes and spot any loans/transactions that you did not approve.

4. Fixing the problem – Don’t shy away from getting your report corrected if you spot irregularities. CIBIL maintains millions of records, and there may be clerical or human errors due to which the information on your report may be incorrect. Worse, someone may have stolen your PAN or identity and committed fraud. Get them reported straightaway and prevent a dip in your score as much as possible.

5. Never make a late payment – Avoid making a late payment as much as possible. Late payments take a heavy toll on your credit history; they are the worst of the causes for a drop in your score. Try to make sure you make at least the minimum payment if not the large payment you envisioned and avoid late payments at all costs.

6. Have a budget – When you are on a fixed income, you should be careful about the expenses you incur. Be sure to have a budget and stick to it so you don’t have to apply for loans unnecessarily and rely more on borrowings than your income.

The above ways are some of the easiest to get your credit score in shape. You should, of course, think twice, even thrice before you apply for large credits, but you will never have to worry about a credit approval if you have a healthy credit score always.

Official Writer:- [Romy Nash]

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