04-Jan-2019 written by : FSI-Team
With the year drawing to a close rapidly, it is time once again to start setting new year resolutions for the year ahead. How about this year you make resolutions that will help you improve your credit health and your overall financial well being as a result? Here are five ideas of how you can go about improving your credit health in the ensuing year.
Do you find it difficult to make timely repayments or utility bill payments? Are your debt repayments all in a clutter. Well, that is the first place to get started then. The good news is you can use technology as an efficient aide. Take the help of the calendar app on your smart phone and set up reminders for all your billing due dates. There are several other free apps that can help you get organised and make repayments a breeze.
Automating your payments is another way too ensure that you never delay repayment of outstanding bills on your credit cards or other debt obligations. Timely repayments is one of the most important factors that influence your credit score.
When you are servicing debt or even otherwise, it is very important to commit to a proper spending plan. A spending plan will not only help you gain a firm control over your finances, and will go a long way in instilling financial discipline. Financial discipline is of utmost importance for both debt management and investment management. Further a budget, when followed judiciously, is likely to bring down your overall credit utilisation ratio or the total amount of credit you use as against the total amount made available to you. This in turn will also have a positive impact on your credit score.
If you multiple credit cards and are finding it difficult to keep track of them, it is time to consolidate. Shift your balances to one or two credit cards and clear outstanding payments on the rest. However, do not make the mistake of closing old credit cards, as it will impact the age of your credit. You may not use the cards if you don’t wish too, but if you have maintained a good track record of repayments on it, it will help you sustain a good credit record. Keeping your old credit card open will also keep your credit utilisation low. If credit utilisation is high on your cards, you can also consider requesting your credit card issuer to enhance your credit limit. However, be careful not to step into a debt trap by increasing your spend.
To maintain a good credit record, it is also essential keep a vigil over your credit health. In this new calendar year make a resolution to check your CIBIL report at least twice in a year. You can use the access one free CIBIL report annually from CIBIL, a facility that the country’s premiere credit bureau provides at least one of these two times. Keeping a close watch over your CIBIL report will ensure that errors and discrepancies do not make a way into your CIBIL report, thus dragging down your CIBIL score.
By using these simple hacks, you can improve your credit health considerably this year. This will not only keep your CIBIL score high but also help you improve your overall financial health.