Unlike in past, today, the process of getting loan does not end at the ability of the borrower to repay. It entails large details of repayments history of the borrower.
Unlike in past, today, the process of getting loan does not end at the ability of the borrower to repay. It entails large details of repayments history of the borrower. Due to such a critical factor, many a time, a lot of people fail to avail of a loan just because they have been irregular in their repayments of their liabilities. Such people have a low credit score—a number that gives a fair idea of deviation of an individual in repayments of loans. Hence, higher the credit score, better are the chances of getting a loan. Here are some of the factors you should bear in mind to improve your credit score:
Be it an outstanding amount on your credit card or EMI on a loan, you should pay it on time. Sometimes cheques take time to reach bank due to logistics issues and holidays. It is better to drop the cheques in the pick up boxes at least five - six days before the due date. There are instances where borrowers repay only the minimum payment required on credit cards or opt to make part payment of EMI. Part payments typically lead to a lower credit score. It is better to make payments electronically and have standing instructions on your bank account to ensure that the bills are paid on time. In case of standing instructions, it is important that you should have sufficient amount of money in your bank account for smooth execution of standing instructions.
Too much unsecured credit…
As banks insist on a credit score while sanctioning a loan, there are cases where individuals come to know about their poor credit score at the time of loan applications. It is better to seek professional help if you cannot improve your credit score yourself. Improving a credit score is a gradual process and there is no 'get it right quick' solution. So do not throw money on any service that claim to be selling a quick solution.
The writer is a Co-founder & Director at www.creditvidya.com .
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