Top 3 ways to increase credit score
So firstly lest start from basics
What Is a Credit Score?
The credit score model was created by the Fair Isaac Corporation, also known as FICO, and it is used by financial institutions.5 While other credit-scoring systems exist, the FICO score is by far the most commonly used. There are variety of the way to enhance a person's score, including repaying loans on time and keeping debt low.
The credit score model was created by the Fair Isaac Corporation, also known as fico, and it is used by financial institutions.5 While other credit-scoring systems exist, the fico score is by far the most commonly used. There are variety of the way to enhance a person's score, including repaying loans on time and keeping debt low.
NOW LET'S START WITH THE WAYS TO IMPROVE YOUR CREDIT SCORE
3 ways to improve credit score
Now you are going to read the ways to improve the credit score so be focused and use these simple tricks to increase the credit score in reasonable time
1.TRY TO PURCHASE EVERY HOUSEHOLD ITEMS ON EMI's
So basically it means that all the household items that you are going to purchase in future like refrigerator, television, smartphone,AC'S etc. And even the automobiles like cars, bikes etc. You should purchase all these items on EMI'S .
HOW IT HELPS TO INCREASE YOUR CREDIT SCORE?
So when you purchase items on EMI ,the shops take your pancard and Aadhar card for verification and when you pay your EMI'S on time it will be recorded on the pancard. It directly increases your credit score .SO whenever you apply for a loan and submit your pancard for the same then all the information will be available to the lender also .
2. GETTING A CREDIT CARD EVEN WITH THE LOWEST LIMITS
So in this step you have to approach your bank and should apply for the credit card .If you are eligible for a credit card with higher limits then it's better but if you are bot eligible for high limits you should just go for a credit card with the lowest limit but you should have a credit card .
REQUIREMENTS FOR CREDIT CARD
So the different banks have different requirements for the credit card which you can check by visiting the website of the respective banks just make sure that you read all the documents and know about the annual charges and other hidden charges if any.
HOW IT HELPS IN RAISING YOUR CREDIT SCORE
So if you use credit card for your transaction and pay the credit card bill before due date then it directly effects your credit score and helps to increase your credit score faster then any other ways .
3. MAKING A FIXED DEPOSIT WITH YOUR BANK
So the last way is to create a fixed deposit even of a small amount helps you to increase the credit score .
The banks also provide the credit card on the fixed deposits which can further help you to increase your credit score.
HOW IT HELPS IN RISING YOUR CREDIT SCORE
So when you have a deposit with the bank it directly effects your records and the credit card that is alloted to you also helps in increasing the credit score.
Now,
WHY TO HAVE A GOOD CREDIT SCORE?
So i will be explaining the reasons to have a good credit score. Although i will be making a seperate blog explaining about the maintenance of credit score but i will be providing some basic points which are the main reasons to maintain a good credit score
4 main Reasons to maintain credit score
4 main Reasons to maintain credit score are:-
1.Low Interest Rates on Credit Cards and Loans
The rate of interest is one among the prices you buy borrowing money and, often, the rate of interest you get is directly tied to your credit score. If you've got an honest credit score, you’ll nearly always qualify for the simplest interest rates, and you’ll pay lower finance charges on mastercard balances and loans. The less money you pay in interest, the faster you’ll pay off the debt and therefore the extra money you've got for other expenses.
2.Better Chance for mastercard and authorization
Borrowers with a poor credit history typically avoid applying for a replacement mastercard or loan because they’ve been turned down previously. Having a superb credit score doesn’t guarantee approval, because lenders still consider other factors like your income and debt. However, an honest credit score increases your chances of being approved for brand spanking new credit. In other words, you'll apply for a loan or mastercard confidently .
3.More Negotiating Power
A good credit score gives you leverage to barter a lower rate of interest on a mastercard or a replacement loan. If you would like more bargaining power, you'll cash in of other attractive offers that you’ve received from other companies supported your credit score. However, if you've got a coffee credit score, creditors are unlikely to budge on loan terms, and you won’t produce other credit offers or options.
4.Get Approved for Higher Limits
Your borrowing capacity is predicated on your income and your credit score. One of the advantages of getting an honest credit score is that banks are willing to allow you to borrow extra money because you’ve demonstrated that you simply pay back what you borrow on time. You may still get approved for a few loans with a nasty credit score, but the quantity are going to be more limited.
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