Here are the Tips ” How to Increase Credit Score Quickly in 2020″. But before know How to Increase Credit Score Quickly. You should first know Why your credit score matters. If you have an excellent credit score, you can use great scores into great deals-on loans, credit cards, insurance premiums, and having a housing loan.
- Review your Credit Score regularly
- Check Free Credit score from CIBIL
- Check the status of the accounts
- Monitor your co-signed, guaranteed, and joint accounts monthly
- Clear your revolving credit card balances asap
- Pay your dues and EMI on time.
- Apply for a Higher Credit limit
- Become an Authorized User
- Maintain a healthy credit mix
- Apply for a Secured Credit card
- Apply for new credit in moderation
- Keep Old Debt on Your Report
Review your Credit Score regularly
Do you remember the last time you have checked your credit report ?. Your reply maybe No, or Maybe when applied for a personal loan. Very few personal check credit score regularly. Reviewing credit scores regularly is the first step towards having a good credit history.
Credit Score ranges from 300 to 900. A score above 778 to 900 is considered excellent, and a score between 765 to 777 is considered a good credit score. If you never defaulted loan, then your credit score will be more than 750. A good credit score increases your chances of getting a loan or credit card but may help get a lower interest rate.
Check Free Credit score from CIBIL
In India, you can check credit scores from four credit bureaus – CIBIL, Experian, Equifax, and CRIF High Mark. All credit bureaus use their proprietary algorithms and credit scoring models to get a credit score. If you check the Credit score simultaneously as all credit bureaus, the score will change from bureaus to bureaus.
You can get one free credit report from the above credit bureaus in the calendar year. However, a Credit report from CIBIL is most widely used. You can get Free Credit CIBIL report from this link
Check the status of the accounts
First, check the Credit Report thoroughly. Normally Credit Report is categorized into Credit Score, Personal Information, Contact Information, Employment Information, Account Information, and Enquiry Information.
You Credit Score is calculated based on credit behavior as reflected in the ‘Accounts information’ and ‘Enquiries’ section of your Credit report. A score above 778 to 900 is considered excellent, and a score between 765 to 777 is considered a good credit score.
The personal information section in reports contains Your name, Date of Birth, Gender, and identification numbers such as PAN, Voters ID card No, Passport No. Check all the details reflected in the personal information section are correct.
Address and contact numbers are present in Contact information section. Check your Email ID, Mobile Number are correct. Generally, the address is incorrectly reported by banks and financial institutions.
In this Section, Monthly or annual income details as reported by the Banks and Financial institutions. This is the latest information reported by banks.
This is the most important section of the Credit report because this section all Credit details like home loans, auto loans, personal loans, and overdraft facility, etc..). You check here loan accounts open date, date of last payment, current account balance, loan amount. Credit Score is calculated based on the last 3 years of credit information contained in this section.
This section has all Enquiries related to credit applications, like Credit cards and personals loan applications.
Monitor your co-signed, guaranteed, and joint accounts monthly
Sometimes you give your consent to become a guaranteed or co-signed borrower of a loan. It may be a housing loan, personal loan, or Motor loan. In the case of co-signed, guaranteed, or jointly held accounts. You are held equally liable for missed payments. Your joint holder’s negligence could affect your credit history. You may not get the required credit when in need. So only be co-signed, guaranteed, and joint accounts holder of trustworthy persons.
Clear your revolving credit card balances asap
You should pay off revolving credit card balances as soon as possible. It’s a myth that carrying a credit card balance helps to increase credit score. Revolving credit card balances increase the Credit Utilization ratio, which can hurt the Credit score. Also, if you carry revolving credit balances, you pay heavy interest on it. Credit card outstanding balance interest rate normally ranges from 46% to 30%.
Pay your dues and EMI on time.
Paying your dues and EMI on time is the most important factor in Increase Credit Score Quickly. This is one of the important things that CIBIL or other credit scorer looks into while checking credit rating. Even you should add rent payment and other utility bill payments to your report.
Rent and utility payments are common items that don’t appear on credit reports in part because landlords and other Services providers don’t tend to report them. However, you can ensure that these payments are reported in the Credit report by paying these utility bills through smart payment options, like No Broker, CRED, and Extra credit.
Apply for a Higher Credit limit
If your current credit card limit is low and you normally spend above 30% of all credit limits, then it’s time to request your banks and Credit card issues to increase your credit limit. Credit card issuer normally increases credit limit periodically after evaluation of your credit behaviors.
However, you don’t spend beyond your repayment capacity. Increased credit limits should be used only for having low credit utilization ratios.
Become an Authorized User
If your credit history is not in good shape, you can become an authorized user of a family member’s credit card. If a family member will add you as an authorized user to their credit card account. Many banks and financial institutions report account activity to both the cardholder’s and authorized user’s credit report. That’s the way you can increase your credit score quickly.
Maintain a healthy credit mix
Maintain a healthy credit mix through Home loans (Secured), Personal loans, auto Loans, and Unsecured credit card loans. Having all types of credit mix in your credit report can boost your perceived creditworthiness. Too many unsecured loans may be viewed negatively.
Apply for a Secured Credit card
If you do not have a credit history till now, you can apply for secured credit. Most of banks issues secured card by having small Fixed Deposit. For me, the best-secured credit is Kotak 811 DreamDifferent Credit Card.
Apply for new credit in moderation
Too many credit inquiries and credit applications can ruin credit history.Continuously seeking excessive credit shows your credit hungriness. Financial institutions may decline your credit applications, so apply for new credit cautiously.
Keep Old Debt on Your Report
Keep your old credit card in your credit history. Please don’t remove it. Long credit history increases your credit score. Normally credit card bureaus give credit weightage if your credit history is more than 3 years.
If you want to build credit score quickly, you have to follow certain basic rules.
First, Keep credit utilization ratios low ( Less than 30% of Credit Limit). Second, pay card balance entirely when dues, and last, don’t apply for too many credits simultaneously from different lenders or credit issuers.