We all know that our lives run smoothly when we develop few habits that provide a structure to our routines in daily lives. Similarly, we have developed few financial habits that were learnt from our parents. But now to suit our modern lifestyles and needs we need to be more cautious and develop habits cautiously which will help us to build a secure financial future. Here comes in developing good habits for optimising the credit scores which are reflected in the CIBIL credit report.
Sometimes it so happens that we are unaware of certain glitches that hamper our credit scores which ultimately impacts our loan rejections.
In order to maintain a good credit score it is advisable to keep in mind the following aspects:
- You need to spend less than you earn or your authorization on your credit cards: In other words, live within your means, and though you are authorised for a huge sum on the credit card never use the complete amount. This is because at the end of the day you will need to repay it, maybe in a few days. For example, if you apply for a home loan smartly plan for your EMIs within your means that you can manage and doesn’t leave you in debt.
- Use credit wisely but don’t rely on it: Do not purchase or buy relying on your credit card. Check if you can repay it otherwise, withdraw from buying that item. Act wisely. Don’t have too many expectations on the credit card.
- Maintain financial documents in order: Keep all your financial documents in order and organised up to date. Also, set up alerts on your calendar that reminds you of your so that you don’t miss any payments even if the bill doesn’t come on time.
- Have buffer amount for emergencies: Always plan for exigencies and the buffer amount will enable to see you through in tough times. It will prevent you from falling into a wide debt trap. Without buffer funds, you cannot be regular in your payments and this will adversely affect your credit scores.
- Prompt payments every time: You should remember that you should pay on time every time. Not even a single payment can you afford to miss to maintain a healthy credit score. A minute delay in repayment can reflect badly on your CIBIL report as a bad credit score. The easiest way to pay on time is set up an auto debit system linking your bank account to your credit card.
- Apply for credit sensibly with gaps: Apply for credits only if you are in dire need. Constant and regular applications for credit reflects your finances as poor and that you are desperate to avail a credit for a car loan, house loan, personal loan etc., which may be rejected because of poor credit score.
- Check co-signed or joint accounts: If you are a guarantor for any loans you need to regularly keep a tab on the payments as these reflects in your CIBIL report. Though you are not the first holder, you are equally responsible because you are either a co-applicant or a guarantor.
Hence by following few of the easy to do things you can maintain a great CIBIL report.