Are you unable to get a loan due to poor credit score? If you follow these 6 measures, your work will be done

In this era of inflation, people do not have savings like before. In such a situation, loans are needed for big works. But if your credit score is not good, then you may face problems in getting a loan. In such a situation, it is important to keep your credit or CIBIL score strong. This increases your credibility to repay the loan. Today we are going to tell you some such things, by adopting which you can increase your credit score.

 

How much credit score is good

The credit score ranges from 300 to 900. TransUnion CIBIL is one of the four credit bureaus that generate credit score reports in India. The closer the CIBIL score or credit score is to 900, the better it is considered. A score between 300 and 549 is considered the worst. Similarly, a score between 550 and 700 is considered fair.

Do not take multiple loans at the same time.

Try to keep the number of loans taken in a given period to a minimum. Repay one loan and then take another to prevent your CIBIL score from dropping. If you take multiple loans at once, it will show that you are stuck in a cycle where you do not have enough money. This will result in your CIBIL score going down even further. On the other hand, if you take a loan and repay it successfully, it will increase your credit score even more.

Take a long-term loan.

Keep in mind that whenever you take a loan, try to choose a longer tenure for repayment. This will ensure that your EMI is low so that you can make the payment on time. Your credit score will improve when you do not delay or miss the payment of EMI.

Pay EMI on time

Repayment of your outstanding loan can have a huge impact on your credit score. In such a situation, you need to maintain discipline while making EMI payments. A delay in EMI payment leads to a penalty and decreases your credit score.

Keep old credit cards active too.

If you have old credit cards, you should retain them as long as you can pay your bills in full on time. This will help you build a solid and long credit history, which will help you increase and maintain a good credit score in the future.

Customize your credit limit.

Your credit utilization ratio has a significant impact on your credit score. The more you can restrict your credit utilization to the set limit, the better it will be for your credit score. Reaching the limit has the opposite effect as it lowers your credit score. One way to deal with this is to approach your bank and customize your credit limit based on your expenses.