There is no magic wand that can guarantee to elevate your credit score just like that. But there surely are ways in which you can raise your credit score. All you need is a little bit of patience and understanding.
Like other financial goals, improving your credit score should be another financial objective, and for that, you have to keep track of your credit score on a regular basis.
Credit scores fluctuate by a few points from one month to another, but if you are looking for significant improvement in your credit score, then it will take time.
There is no guarantee of how much you can raise your credit score in 30 days. But if you can identify why your credit score is low, then it will be much easier to raise it in 30 days.
Here are a few tips on how you can raise your credit score in 30 days:
Be responsible when it comes to repayment
A major part of how you can improve your credit score depends on how particular you are about credit cards and loan repayments. A borrower who has a good track record when it comes to credit repayment is considered a responsible borrower. Non-payment of debt on time has a significant negative impact on your credit score.
A limited credit application is a better choice
Your credit score suffers when you apply for too many loans or credit cards at the same time. Under such scenarios, lenders question your financial status and often mark you as a credit-hungry borrower. Multiple credit applications at the same time indicate that you want a lot of debt, and there is always the possibility that you may default on repayment.
Lower the credit utilization rate
Credit utilization is how much of the given credit limit you are actually using. Your credit utilization rate should never exceed 30% of your total credit limit. A lower credit utilization rate is an indication that you are a responsible borrower. Also, if you lower the credit utilization it will be much easier to pay back the debt, and your credit score will definitely rise.
Review your credit score regularly
It is essential that you check your credit score on a regular basis. Occasionally, your credit score may suffer due to something that shows up in your credit report. Unless and until you review your score, you will not come across such issues. If you come across errors such as improperly reported payments, a wrong account added to your name, or a name mismatch with someone else, you should definitely raise a dispute with the credit bureau.
Avoid closing old accounts
Having an open credit account and using the balance sensibly proves that you are good at handling credit. Again, when you close an account, the available credit decreases, raising your credit utilization rate, which impacts your credit score. Keeping an old credit account active keeps your credit history alive and raises your credit score.
You know now that building a good credit score is important when it comes to getting a good deal on your next loan or credit card application. On the other hand, it takes a bit of effort to build and maintain a good credit score. Follow the tips we have discussed in this article, and surely you will end up with great credit.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.