How To Improve Your Credit Score – Dos And Don’ts

What is Credit Score: It is a statistical quantity primarily based in your credit score historical past, reimbursement habits and different monetary information collected from monetary establishment by the score companies. Your Credit Score is an indicator of your Credit Worthiness. This information is collected by the score company primarily based on a key or distinctive identifier like Permanent Account Number (PAN – issued by the Income Tax Department in India) or SSN in USA. Each score company could assign completely different weight-age to completely different parameters used to find out it. Generally, it ranges between 300 to 850 factors.

With the credit score rating examine, the lender will get an concept concerning the chance of default by the borrower, in case a loan / credit score facility is given to him/her. Higher the Credit Score higher are the possibilities for getting a loan at cheaper charges. Hence it is vital so that you can examine it earlier than making use of for a recent loan or credit score. A credit score rating beneath 600 is taken into account poor and usually the monetary establishments keep away from loans to such people. By sustaining monetary self-discipline you can too enhance your it simply. The very small issues or ignorance can critically harm your credit score worthiness. By paying little consideration to those small little issues you possibly can enhance the credit score rating and avail cheaper credit score amenities.

To enhance your credit score rating, it’s best to comply with sure dos and don’ts.


1. Never delay the cost of installments due on current loans.

2. Make credit card payments cost at all times in time. If attainable, use the ECS or Auto debit facility in your card payments cost, in order that there isn’t any probability of forgetting the invoice cost on due date.

3. If attainable, attempt to prepay the present loans. Making a bit of further cost over and above the due EMI or installments not solely helps you cut back the curiosity out-go but additionally helps enhance your credit score rating.

4. Maintaining good and lengthy banking relations with current banker helps you enhance the credit score rating. Frequently altering your banker, particularly the enterprise associated credit score amenities, can deliver it down.

5. Also make cost of your utility payments like electrical energy, cell, insurance coverage premium, municipal taxes and many others in time. Though these do not get reported straight for the credit score rating examine, however these enable you keep monetary disciplined life.


1. Do not take completely different loans from completely different banks. Try to make use of most credit score amenities from one or two banks. For instance you’ve got two housing loans, two automobile loans and one personal loan every of this from a unique financial institution. This type of association will pull down your credit score rating. Try to shift all these 5 loans to at least one or max two banks.

2. Do not rotate the credit card stability from one card to a different card. Rotating stability from one card to a different means, you do not have means to pay the credit card payments. This critically damages your credit score worthiness.

3. Do not totally make the most of or over make the most of the credit card restrict. In case you attain above 90% restrict frequently, ask the credit card issuer to extend your credit score restrict.

4. Do not discontinue your previous bank cards with none purpose or as a result of you’ve got taken a brand new card. Longer the credit score historical past with common invoice funds, higher the credit score rating.

5. Do not take too many bank cards from completely different banks. Maintain most 3-4 playing cards with identical variety of banks. If you utilize these playing cards frequently and make on-time funds of the cardboard payments, your card firm can be completely happy to extend your card restrict.

6. Do not withdraw money from CREDIT Cards through an ATM until it’s an excessive emergency. Frequent money withdrawal from credit card account brings down your credit score worthiness, as a substitute use Debit Cards linked to your financial savings account for money withdrawals.

Try to acquire your credit score rating sheet yearly, in order that you recognize the place you stand. In case you discover any errors within the reported transactions in your sheet, instantly report the identical to the involved monetary establishment for correction and updating the identical with score companies, particularly if you find yourself planning to take a recent loan / credit score facility.

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