When you are young, you get a lot of suggestions on your education stream choices, career choices and also extra curriculum choices, but no one suggests you try building a credit score when you have just started your career. A credit score plays an important role in your financial health, as this is the only way you can get a loan. If you do not have a credit score to start with you will definitely be denied any type of loan in future. We are suggested by our elders, not to take any debts to fulfill your needs but sometimes situation demands you to opt for a loan and that is when the credit score comes to your rescue.
There are a lot of factors which contribute to your credit score and also many factors which can cause you lose your cibil points, what really important is do you even have a cibil score to start with? How do you build one? What is the right and smart way to build a perfect credit score which can act as a big booster when applying for a loan?
Today we will be sharing you magical ideas to establish a credit score from scratch,
If you are starting a new credit journey and want the best cibil score calculation apply for a secured credit card. This is one type of card where you will be given a credit card in regards to the money handed the lender as collateral. The initial limit will be very small as compared to other cards, but it can be a big boost to your no credit score. In this type of card the terms and conditions remain same as a normal credit card, like penalty charges, award points; the only difference would be if you are not making the payments on time the money will be deducted from your collateral money which is deposited to the lender.
Imagine it's your first job and want to gift something to your parents like a mobile phone, a refrigerator. A consumer loan will come to your rescue not only you will get the loan with minimum documentation but also with no interest. This type of loans are easy to avail and most importantly can be availed without a credit report. You just have to submit all the documents related to your employment, identity roof and residential proof and there your loan is sanctioned in no time. Do make sure you make your monthly installment payments on time as it can create a huge impact on your newly established credit report.
Once you know that your cibil score is more than fair, try applying for a new credit card. A credit card being an unsecured financial product creates a huge impact on your cibil report. If you make timely payments to the card lenders your cibil score will reach sky high in no time which will aid you when you are applying for a bigger loan. Vice versa if you fail to make the payments on time your cibil score will go down drastically which will result to low cibil score and a low cibil score means no loan in the future. You can get a loan for low cibil score but the interest rates and other terms and conditions related to a loan will be higher than market standards.
If you think the credit score will go up because you have a credit card with you, then you are mistaken. Not using the credit card is also more hazardous. Try making small transactions like buying groceries, paying for utilities so that you have transactions on your card but make sure you pay your dues on time and be financially healthy. This can boost your chances of elevating the credit score sky high. Do not make minimum due amount, this will create problems for you in the future while applying for a loan, make full payments.
Try taking multiple cards when you are confident about your payment patterns and your financial stability. When you start fresh here just make sure you are on the right path.