Wednesday, January 11, 2012

Seven Steps to improve your credit score in India

Want to improve your credit score but not sure how to do it. Here are seven steps for you to improve your credit score:

1) Always have unsecured credit in your loan portfolio. It is better to have a credit card in your loan portfolio. Also important is to use the secured credit and pay on time. A person who shows commitment on payment of unsecured credit gets higher score than a person having secured credit

2) Always pay Rs.1 more than your credit card due. This will make your credit card balance as negative and help you have higher score

3) It is extremely important that you never have any overdue in your loan accounts. Always ensure that all your loans are paid on time.

4) Some credit bureaus use last 24 months credit performance for scoring. It is hence important that you keep your recent credit history at least last 2 years credit history.

5) Do not apply for loans to multiple financial institutions. As more and more credit grantors access your credit history, your credit score falls

6) Never be a guarantor of a loan unless you are sure that the person from whom you are giving guarantee will fulfill his loan obligations. Please remember if the person for whom you have given loan guarantee defaults, your credit score will go down.

7) Keeping on accessing your credit report at least once in a year. If there is any error in your credit report, you can get it rectified before it is too late.

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