Wednesday, 11 February 2015

Build your credit fast by these rules!

Following a responsible credit life is good financial practice for every individual. You get better chances of getting approved for loan and that too with better interest rates. In spite of all this, advantages during renting or buying a house and during employment opportunities, qualifying for a corporate credit card etc.

Want to build credit? Have patience:
Credit score cannot be changed overnight as they reflect your credit behaviour over a period of time. You can’t just improve them in a day- don’t listen to people who say you can fix it in a day. The good thing about it is that credit scores concentrate more on present activity so if you have negative information in the past they won’t matter much as they keep on ageing.

Bad credit cannot be erased:
Negative information ruins your credit score because it stays on your report for a long time. They may remain on your report from a period of 7-10 years. So try to avoid adding any kind of negative term to your report.

Regular bill payments:
Paying bills regularly doesn't give you any additional points but it certainly does help you build a responsible credit history. In fact if you are not regular and default on your payments, it would hurt your credit score that much.

Use Credit:
The main key to building your credit is using credit in form of credit cards and loans. But this credit should be used in moderation and not be over used. Maintaining a low balance on credit cards and paying off the instalments on time is the right way to build your credit. These show how responsible you are with the credit you use and helps boost your score. Also having different lines of credit is important.

Establish a long history of good responsible credit behaviour and you would build your credit in no time. Credit scores are calculated by the credit bureaus like CIBIL, Equifax etc on the basis of the information provided by various banks and lenders.

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