How To Improve Your Credit Score

What is Credit Score: It is a statistical number dependant on your credit history, repayment habits as well as other financial data collected from lender by the rating agencies. Your Credit Score is undoubtedly an indicator of your respective Credit Worthiness. This results are collected from the rating agency depending on a key or unique identifier like Permanent Account Number (PAN – issued from the Income Tax Department in India) or SSN in USA. Each rating agency may assign different weight-age to various parameters familiar with determine it. Generally, it ranges between 300 to 850 points.

With however, the credit check, the lending company gets a concept about the likelihood of default with the borrower, when a loan / credit facility is offered to him/her. Higher the Credit Score better include the chances to get a loan at cheaper rates. Hence it is vital for you to check it before applying for the fresh loan or credit. A credit rating below 600 is known as poor and customarily the banking companies avoid loans to such individuals. By maintaining financial discipline you can even improve your it easily. The very small things or ignorance can seriously damage your credit history. By paying little awareness of these small tiny problems you can improve the credit rating and avail cheaper credit facilities.

To improve your credit history, you ought to follow certain dos and don’ts.


  1. Never delay the payment of installments due on existing loans.
  2. Make in debt payment always over time. If possible, utilize the ECS or Auto debit facility on the card bills payment, in order that there is no possibility of forgetting into your market payment on deadline.
  3. If possible, seek to prepay the current loans. Making a little extra payment past the due EMI or installments not simply helps you decrease the interest out-go but helps improve your credit rating.
  4. Maintaining good and long banking relations with existing banker assists you to increase your credit standing. Frequently switching your banker, specially the business related credit facilities, may bring it down.
  5. Also make payment of one’s utility bills like electricity, mobile, insurance premium, municipal taxes etc soon enough. Though these do not get reported directly for your credit rating check, these help you maintain financial disciplined life.


  1. Do not take different loans from different banks. Try to use maximum credit facilities from a single or two banks. For example you could have two housing loans, two car finance and one unsecured loan each of this from the different bank. This kind of arrangement will pull down your credit worthiness. Try to shift these five loans to a single or max two banks.
  2. Do not rotate the cardboard balance from card to a different card. Rotating balance from card to a different means, you do not have means to pay the credit card debt. This seriously damages your credit history.
  3. Do not fully utilize or higher utilize the greeting card limit. In case you reach above 90% limit regularly, ask the charge card issuer to enhance your credit limit.
  4. Do not discontinue your old plastic cards without any reason or because you might have taken a brand new card. Longer the loan history with regular bill payments, better the credit rating.
  5. Do not take too many plastic cards from different banks. Maintain maximum 3-4 cards with same quantity of banks. If you use these credit cards regularly to make on-time payments on the card bills, your card issuer would be happy to improve your card limit.
  6. Do not withdraw cash from CREDIT Cards with an ATM unless it is definitely an extreme emergency. Frequent cash withdrawal from bank card account lowers your credit score, instead use Debit Cards related to your savings for cash withdrawals.

Try to get your credit standing sheet annually, making sure that you know your location. In case you find any errors within the reported transactions in your sheet, immediately report the identical to the concerned lender for correction and updating a similar with rating agencies, specifically when you are planning to require a fresh loan / credit facility.