Do you know the significance of a CIBIL Score and how you can maintain a healthy CIBIL Score? A CIBIL Score is a 3digit numeric summary of your credit history which is considered by the lenders for loan approvals. Maintaining a good CIBIL Score is vital if you want to apply for a loan.
Here are some effective ways that can help you maintain a healthy CIBIL Score:
Clear off all your credit card debts: The foremost thing to improve your CIBIL Score is to clear your outstanding debts. The unpaid outstanding debts month on a month will significantly impact your credit score. Regularly checking your credit score can help you rectify any discrepancies that might have been impacting your CIBIL Score. Furthermore, to make sure you pay your outstanding debts on the time you can set reminders on your phone.
Pay your bills on time: Every time you miss out on paying a bill it adversely impacts your credit score. In order to maintain a healthy CIBIL Score, it is essential to pay off your bills from time to time. When paying the bill on your credit card always remember that there are two significant components in it. One is the total payment and another one is the minimum payment due. Every time you make the minimum payment an outstanding amount gets added to your new transaction and your card will attract interest rate that will keep on increasing with every new transaction you make. So, make sure you pay all the outstanding debts on time in order to maintain a healthy CIBIL Score.
Avoid over usage of your credit card: Every credit card has a spending limit which is set by the lender depending on the borrower’s repayment capability. Avoid over usage of your credit card beyond its estimated limited as it might impact your credit score and add outstanding debts on your credit card. Although it is a recommended practice by most of the experts it is not mandatory to follow it.
Avoid cash withdrawals using a credit card: Withdrawing money using a credit card is expensive in comparison to making payments directly through a credit card.Banks charge a high interest rate if you withdraw money from your credit card and there are chances your credit score might get affected as a result of these withdrawals. Whenever you withdraw money for any transaction avoid using a credit card for such withdrawals and try using a debit card so that your CIBIL Score does not gets impacted.
The next time you plan to purchase a credit card make sure you pay your bills on time so that your CIBIL Score does not get affected. Following these easy hacks, can help you in maintaining a healthy CIBIL Score.