28-Nov-2018 written by : FSI-Team
As the famous saying goes, "nothing is perfect under this sun". When it comes to the credit score, it means that one would never be able to attain the perfect score of 900, if the saying was to be believed. While attaining perfection on the credit profile still may be doubtful, but one can definitely get to a point where the scores will be perfect for him.
Meaning that a score where the individual will not only be able to have access to the credit facilities at the time he needs but will also be offered preferential pricing and fee. Goes without saying that even lending institutions are business houses and would not want to lose a customer who has displayed a good credit behavior.
Following are the points that if one follows, will aid the quest to achieve the perfect score for himself.
The credit score is an outcome of the following five factors.
As observed above, the repayment carries the highest weightage and has the potential to swing the score either ways. One must not take the repayment for granted. Even a day's delay can be detrimental in getting closer to that perfect score. One must ensure that the account is funded adequately before the due date. As far the cards go, while the full payment may not have an impact, but paying the amount completely is always advised to be the best strategy by the credit experts. Please note that a lower score will lead to you getting charged a higher interest, including home loan interest rate, which is a secured loan with lowest default rate.
Credit cards are rightly believed to the main culprit in negatively impacting the score if not managed properly. And if managed correctly, they can act as a fried of that perfect score that one would dream to achieve. Do not swipe the card just because the limit is available. One should try to restrict the card limit usage to 30%. A higher usage does have a negative impact since it adds to the amounts owed or to say the exposure on outstanding.
This is something that carries high importance. Checking of credit score at regular intervals will only facilitate management and maintenance of credit score. In case one finds that there is a dip, corrective actions can be taken.