Friday, 23 March 2018

4 Tips to Restore Your Credit Score in the Last Quarter of the Financial Year


It can take months, if not years to build a high credit score. However, many times it takes just one wrong decision or a single instance of carelessness to ruin your report badly.
Fortunately, you can reverse the damage in most cases if your committed to it and willing to make a few small sacrifices.
As we are nearing the final quarter of the financial year 2017-18, it’s a good time to improve CIBIL score and get everything back on track.
The following are the top 4 tips to restore your CIBIL score in Q4:

1. Diversify Your Credit Portfolio
How does report look like? Does it contain repayment details of a credit card, personal loan, home loan, etc.? Or is it unidimensional, with a credit history of only a single form of credit?
If your credit report doesn’t have a variety of credit forms, then maybe it’s one of the reasons why your score is not up to the mark.
To solve this problem, learn about how to check CIBIL score and CIBIL report and see what your financial history comprises of. If there are just credit card repayments, then maybe you can apply for a small personal loan or a car loan. Similarly, if it contains only the repayment of a home loan, then maybe you can apply for a credit card.
Diversification of credit portfolio is one of the simplest and fastest ways to improve CIBIL score in the final quarter of the current fiscal year.

2. Pay Your Credit Card Debt in Full
If you have been enjoying the convenience of minimum payments of the credit card bills for several months, then now is a good time to repay the accumulated debt.
Although minimum payments allow you to prevent penalties on credit card payments, they lead to high debt accumulation. Thus, you should always strive for full payments.
By taking care of your entire debt you can observe a major improvement in your CIBIL score. For even better results, it’s best to start repaying all your future credit card bills in full and on time.

3. Check Report and Remove Errors
A large number of people still don’t know how to check CIBIL score. However, what’s more unfortunate is that even those who do, tend to underestimate the importance of the same and end up with a low score.
To ensure that your credit report stays healthy and up to the mark, it’s strongly recommended that you review the same every 3-4 months.
If it’s been a long time since you checked your report, you should do it once again now that only a few months are left for the FY to end.
In doing that, you can identify errors and mistakes which when rectified, can improve your score. You can also find out about unauthorised transactions that may result from a case of identity theft. Thus, the benefits of frequently reviewing your report are many.

4. Limit the Credit Utilization
There is nothing wrong with using credit cards for payments, shopping, and other kinds of transactions. In fact, depending on what kind of card you have, you can actually save money by spending money via reward points and cashback offers. However, in all this, you must pay attention to your credit utilization.
If you want to improve your credit score, then it’s important to keep your credit utilization below 30% to 35%. So, to take an example, if the limit on your credit card is Rs. 1 lakh, then you should try to spend only Rs. 30,000 to Rs. 35,000 using the same. For other payments, you can use cash or mobile wallets, etc.
In a large number of cases, restoring credit score can take several months. However, the tips given above are most likely to get the desired results faster so that by the time you reach the next financial year, you can start with an improved score.


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