One can be in trouble in finding any kind of credit if the credit score is in bad shape, may be below 700 or 600. Your financial life is affected in many ways due to low credit score. Whenever you apply for any type of a loan your credit score influence the interest rates that you will be paying for the credits. At Mudra home you can check the spectrum of your credit score ranging between 300 and 850. The higher score reflects the low credit risk and avail the best interest rate possible on your credit account. The lenders decide whether the credit score is excellent, good, fair or bad. Even a slight drop in the score can lead you towards an expensive financing. It is important to understand that the credit scores keep on changing and the credit score calculations are shaped by the credit report. The credit report changes with every monthly transaction you make, the payment history, the available credit you have and you use and overall age of your credit history.
With a low credit score lenders will not be able to lend you the desired loan amount. Also the switch over will not be possible due to the low score. The low score shows the credit worthiness of the applicant. Even with any chance you get a loan from any Bank/ NBFC, you have to pay a high amount as an interest for it. Your credit score can be due to over indulgence, your bad credit usage or may be poor financial understanding. There are many ways to improve your credit score. If you have tried yourself in fixing your credit report and failed to get the desired results, you may take the help of credit improvement agencies or contact the experienced team of Mudra home to improve the credit score. The expert team has a complete knowledge of rules and regulations that govern the credit improvement procedures. They will also assist you to handle your disputes, set up a strategic repayment plan, suggest you the different ways to improve your credit condition and in few cases can also discuss with your creditors to provide you the lowest interest rates or consolidate your debts.
Most people are not aware of the credit improvement process. The credit improvement agencies can help you to improve and get over all your problems. Also the following tips can help you to raise your credit score:
Maintain on time payments
Maintaining an ongoing pattern of payment of your bills and other debts is an important factor to maintain a good credit. Payment history counts on your total credit score and nothing can lower or increase it better than paying your bills regularly.
Correction of errors in the credit report
If it’s not your habit of checking your credit report regularly like a health check up, it’s a high time to start. There is always a possibility of having atleast one error in your credit report. A small error like a misspelled name can mingle up with someone else’s credit making your credit report worse. Every consumer can check his/ her crea income dit report once every year for free.
Settle outstanding accounts
If your accounts are awaited for long many creditors may try to collect more than what you owe and still the remark on your credit report will remain for 7 years. If possible, you may try to contact the creditor and try to settle the outstanding bills on your account. If the bills are already handed over to the collection agency, you can ask the contact information of the agency or the contact person. Once you settle down or pay off the bills, make sure that the credit repost reflects the same.
Increase the amount of credit card payments
Paying a minimum amount to your credit card bills will not be sufficient to compromise on your current status. It’s not a favor towards you or the creditor but it’s your duty to pay your dues on time. There is a possibility of certain circumstance that paying the due amount on time is not possible. You can try to generate any extra income or savings to boost your monthly payments. This action will reflect in your credit score within few months.
Maintain a low debt –to –available ratio
It’s not necessary that if your creditor allows you spend a Crore in a month then you have to use the complete amount at one go you have to use the complete available amount from the creditor. Spending a high debt to available credit ratio can bring your credit score to an extent where no credit will be availed in future. Your resistance to use your maximum credit limit will reduce your stress and increase your credit score.
Different credit accounts
To carry different credit loan accounts can boost your credit score. A personal loan can help to settle your credit card loan. a secured loan can also be helpful for the settlement of different unsecured loans.
To consolidate many debts into one can also be a solution to your problems. The single monthly payment will solve your two purposes: firstly it will eliminate the high end interest paid debts and secondly you will get a single place to pay at a single due date.
No magic work There is no magic wand that will eliminate the multiple and serious errors in your credit report. The way it took time for the credit score to sink similarly, it will not rise immediately. To yield better results your exercise needs a lot of patience and strategies.