Thursday, 18 May 2017

Want to Join 800+ Club? These are the Secrets of People with High Credit Score

If you have been neglecting your CIBIL score all this time now, then you must take control immediately. While it’s not impossible to improve CIBIL score it comes at a huge cost, which is why it’s best to build an excellent score before it’s too late. With a high credit score, not only you will be able to enjoy attractive interest rates on loans and credit cards, you can also have the peace of mind that you can get financial support from your bank whenever you need.
The Credit Information Bureau of India Limited (CIBIL) provides credit scores ranging from 300 to 900. Generally, a CIBIL score higher than 650 is considered good. However, if you are a perfectionist and willing to go an extra mile, then you can surpass 800 and build a rather outstanding credit report.
The following are the top secrets of the people with near-perfect credit scores:
Payments
Most credit bureaus, including CIBIL, give big importance to the payment frequency of the credit users. In fact, many times it takes just one missed payment to cause a damage of as much as 50 to 100 points.
Credit savvy people understand how important it is to pay their bills and EMIs on time, which is why they go out of their way to ensure that the payments are made prior to the deadlines.
If your score is not increasing despite a lot of effort then try becoming punctual with your loan EMIs and credit card bills. Once you have started paying one bill after another on a timely basis you can easily observe an impetus to your CIBIL score.
Credit Mixing
Most people think that the key to building a high CIBIL score is never missing payments and using credit cards responsibly. However, there is a secret that only smart credit users are aware of, which is the importance of credit mixing.
If you want to give your credit score a big boost in the easiest way possible, then just diversify your credit portfolio. In other words- if your credit report is based on just one personal loan or a home loan then you can get a credit card or two.
If you are already using credit cards and have a personal loan under your name, then you can also take a mortgage if you need. The key is gaining experience with a variety of credits. That being said, you still need to repay your debt responsibly. Otherwise, there is no point in using multiple credit cards when you can’t keep up with the bills.
Credit Utilization Ratio
The credit utilization ratio may sound technical or complicated, but it’s rather simple to understand and not to mention- matters a lot for your CIBIL score.
Credit utilization ratio is the ratio of the combined credit limit on your credit cards and the actual utilization of that credit by you. So, if you have two credit cards with Rs. 50,000 credit limit on each (thus, total= 1lakh) and you are spending about Rs. 40,000 every month using them, then your credit utilization ratio would be 40%.
If you want to improve score fast and go beyond the 800 mark, then you must keep your credit utilization ratio small. It’s best if it’s kept below 30%.
Accounts Closing
When it comes to increasing credit scores you must be very careful when planning to close any credit card or bank accounts. This is because the length of credit history can make a big difference in the equation. If you have a really old credit card that you have been using responsibility, and paying its bills on time then closing that account can put a major dent in your credit score. Thus, if you really have to it’s better to close a rather recent account.

Aspiring to go past the 800-points mark is not a death-wish, but that doesn’t mean it’s easy as well. If you will remain patient and take all the right steps, then achieving a near-perfect score is very much possible.

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