When lender receives loan applications, they look for the ones with high credit score. In fact, a credit score is one of the most important factors that the lenders take into consideration before handing out the money to the borrowers.
This is so because a credit score is a reflection of an individual’s ability to pay back credit dues on time. You can and know your eligibility to get loan.
A high credit score does not face any issues in getting a loan. It is the ones with a bad credit score that struggle to get their loan application approved. A bad credit score is the result of the missed payment or late repayment of dues. Though missing EMI date is quite common around the world a bad credit score will drag you down on many fronts.
In fact, a bad credit score will fetch you a higher rate of interest which obviously would cost you more money. Or in the worst case, your loan application could be rejected leaving you with little options. So, you should check your credit score report before applying for an auto loan, personal loan, home loan and other. This is why you should take steps to increase your credit score.
Read on to know the ways by which you can improve your credit score.
- Pay Bills on Time
Late repayment of dues is one of the top reasons for falling credit scores. Never forget to pay your timely dues. Setting reminders, alarms on your phones, PC’s can help you to repay on time.
- Time Your Loan Application Carefully
A hard inquiry on your credit history is pulled out whenever you apply for a new loan. The fact that an inquiry lowers a credit score for a period of time should make you think twice before applying for any type of loan such as car loan, bike loan and scooter loan. Generally, a loan inquiry lowers credit score for a period of 6-12 months and the loan inquiry remains on your credit history for around 24 months. Therefore, you should avoid applying for a loan in a short period of time.
Also, avoid applying for several credit cards within a short period of time.
- Apply for Credit Cards When in Need
A credit card impacts your credit score quite to an extent. Credit cards have the power to boost your credit cards to a great extent. But credit cards can also make a dent in your credit score if you are not able to repay credit dues on time.
If you have confidence in your repayment habits, then you should definitely apply for credit cards which would boost your credit score to a great extent.
- Check for Any Discrepancies in Your Credit Report
Believe it or not, small mistakes in your name spellings, outdated information have the potential to bring down the credit score. This is why it is advisable to look for any errors in your credit report. If you find any discrepancies like incorrect accounts, incorrect payment status, outdated information then you should notify your bank for the correction.
By using above ways you can raise your latest credit score to a great extent.
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