It is no secret that a good credit score is essential for easy loan approval. It not only affects your loan eligibility but also plays a significant role in determining your interest rate. Therefore, a healthy credit score is a must before applying for a loan. But that’s not all.
As you know, achieving a high credit total needs financial discipline. But maintaining the score is no cakewalk either! So if you already have a decent credit score, here are 5 steps that will help your CIBIL score maintain effectively.
Monitor your credit usage
While applying for any loan provides you with a certain level of financial flexibility, there is a limit to how much you should use. Ideally, you should use 30% or less of your overall credit limit to ensure a stable credit score. This is because depending too much on credit may establish you as a risky borrower. To avoid this, keep track of your expenses to boost your credit score.
Check your CIBIL report
At times, your CIBIL report may contain errors such as obsolete records, incorrect information, or delays in recording any changes. Such issues can affect your credit score considerably. But keeping a regular tab on your credit record will help bring such mistakes to light. It also allows you to report any errors on time to ensure a steady score. What’s more, you can quickly perform a CIBIL score check online for timely insights.
Additional Read: Top 5 Reasons Why You Must Be Having a Low CIBIL Score
Be a smart co-signer
Applying as a co-signer or a guarantor for someone is a common practice. Being a co-applicant with a stable repayment history will help increase your score. However, it also makes you equally liable for the timely repayment of the loan. Plus, the borrower’s loan activity is reflected in your report and can affect your credit health. So, make sure to check the borrower’s credit history before taking the role of a co-applicant.
Check the eligibility criteria
Did you know that it gets reflected in your credit record whenever you apply for a new credit line? Thus, you must apply for a loan only after checking your eligibility with the lender. This will help you avoid multiple loan applications and ensure approval whenever you apply. You can then enjoy a stable CIBIL score, maintain benefits and a seamless borrowing process.
Avoid cancelling old accounts
With time, you may consider cancelling your old credit card accounts when applying for a new one. However, your past credit transactions are a critical aspect of your credit statement. Hence, having maintained them successfully with timely payments will make up for richer credit history. This will work in your favour as the lender will not hesitate in offering you a desirable loan.
You can easily CIBIL score maintain free by using online credit score calculators by credible lenders.
Additional Read: CIBIL Score: Tips on How to Improve CIBIL Score Immediately
These are some of the best ways to boost your credit score. Moreover, taking note of the above mentioned steps and making necessary improvements will ensure a steady credit rating over time.
Besides, with Tata Capital, improving and maintaining a healthy credit score is easier than ever. You can perform a regular CIBIL score check on our website while browsing through our multipurpose loan offerings.