31-Jan-2018 written by : FSI-Team
We are at the beginning of a fresh year; this is the when we often make multiple resolutions regarding our physical health and mental wellbeing too! So this year make a resolution to better your credit health too! A good credit score opens many avenues for you, be it related to getting a loan or a new card application approved or getting a job in some cases. In current times one should not wait for the need to arise before you start focusing on your credit health; inculcating a few habits can help you get a great credit score. We have a road map for you that can help you get a better credit score.
We have a step by step guide for you that can help you achieve your goal of a great credit score; alongside is a flowchart that lists the step.
Get Your CIR and Understand It: The first thing to get started on your plans of getting a good score is to get your credit report and go through it. Without a good understanding of what is included in the CIR or what impacts CIBIL score calculation, getting a good score might not be possible. You should look at various sections and see what is included in each one; personal information and employment details do not impact the score while the information included in the accounts section and enquiries section does impact the score.
Identify the Problem Areas: On going through your CIR you will be able to identify the problems areas (if any) or aspects that need working on. If you see that a delay in payments of your dues is reported on several occasions then you know that this is one aspect the needs working. Similarly, if you see that there are too many enquiries listed in the enquiries section then you know that this is an area of concern and you need to focus on it.
Look for Practical and Effective Solutions: Identifying problems alone is not sufficient till you look for practical solutions to address the problems. If you see that your credit card usage is too high then maybe a solution which says "reduce credit card usage" may not be the most practical one especially so if you are in the habit of using credit cards for most of your transactions. If you do manage to pay all your dues regularly and are eligible for it then getting a bigger credit limit sanctioned might be a more practical solution. Thus it is important that solution be practical and as well as effective.
Work On Them: This is the most important and definitely the most challenging step in the process. Identifying a problem and looking for the solution on paper may appear to be simple but putting the thoughts into action could prove to be a challenge. So whatever is the solution that you have arrived at, to better your score, be sure to follow it diligently? It is important to keep in mind that credit scores are made over a period of time, so looking for any drastic changes in them immediately will leave you disappointed. The key is to keep working on the steps that you have identified and be patient, results will come with time.
Review the Progress: As stated in the above paragraph, patience and consistency is the key to getting a better credit rating. However, it is important that you do review your progress from time to time to see if you are moving in the right direction or to ascertain the effectiveness of the solution that you have arrived at. If there is no change at all even if it is a small one or if the score falls worsens then may be the solution is not effective or you are not following it in a disciplined fashion. If you feel things are not going as planned then you could also seek professional help to improve your credit rating.
So here's to wish you a better health in all aspects of life in this New Year! Get in shape and stay in shape.