28-Jul-2018 written by : FSI-Team
If you have a score of 800 then you definitely are a very meticulous and responsible borrower or you have a secret that needs to be shared. A healthy score opens many gates, getting a loan application approved is just one such opportunity. So it's important that everyone pays attention to their credit heath and they try and stay remain credit healthy. Scoring is done from 300 to 900, a score above 700 is considered to be a healthy, so obviously a score above 800 is something to be proud of. So what is the secret to a credit score of 800?
To be honest it is no secret or something that is not already known but we often tend to overlook these aspects. There are five factors that impact the credit score so whether you want to increase CIBIL score or you want to maintain your score, focusing on these aspects will do the trick.
A Good Start Gives You an Edge: Credit scores are all about credit history so not only your current credit habits but that from the past will also impact your credit score. A credit score will not improve or dip overnight, it takes time to build it so make sure you start the right way. Be sure to be responsible and aware credit user right from your first card or loan. This will ensure that you do not have to work on undoing your mistakes from past which can take time and effort, thus making it difficult for you to get credit later down the line.
Don’t Stretch Yourself: This is another habit that can go a long way in helping you maintain an excellent credit rating, borrowing only what you can pay easily. If you already have a loan running or even if you don’t have one and plan to take one then make sure you borrow only the amount for which you can bear the EMI comfortably. Don’t stretch yourself assuming that you will be able to somehow manage the repayment.
Always Budget and Plan Ahead: While taking a loan and also every month budgeting is crucial. When you apply for a loan, plan ahead and see what your expected future outflows are, how much EMI you can pay considering your expenses (both current and what you expect them to be in future) and also your income. Each month also you need to stick to your budget; EMIs and credit cards need to be paid first then you should make the discretionary expenditure. This will ensure that you do not miss any payments due to lack of funds.
Use your Credit Card Mindfully: This is something which may not seem so obvious so people may tend to ignore this aspect. Using your credit card mindfully goes a long way in helping you maintain a healthy score. While using your card always make sure that your spending is not more than 30% of the sanctioned limit, this applies to all the cards individually and collectively too. The sanctioned credit limit should not be considered the threshold for spending regardless of whether you are able to repay the dues or not.
Be a Disciplined Borrower: This definitely is the most crucial aspect if you want to have a credit score of 800 and you want to avoid looking for a loan with bad CIBIL score. Being a disciplined borrower means that you always pay all your dues on time as repayment history is biggest contributor to your score calculation. Do not make unnecessary credit enquires as that also can have an adverse impact on the score. Discipline in your treatment of your credit will make sure that you have an excellent score and not only a good score.