Believe it or not, a credit score plays an important role when it comes to our financial life. Be it, getting a personal loan when urgently needed or getting a car loan, a good cibil score boosts your loan application for a speedy approval. To get amazing loan deals, you score should be at least 750 and up. You can still get good deals if you are near about 700.
As easy as it sounds but maintaining a good credit score is not an easy job. There is a lot of dedication involved when it comes to getting a good credit score and maintaining it. You will have to make all your payments on time, maintain a good non-debt account all the time. Sometimes, you will also have to play with your finances, like getting multiple loans just to give that extra push to your score.
If you are one of these people, who likes to make all the payments on time, has minimum loans on their account and is confident that you won't have a bad cibil score. Unfortunately you are wrong! There are lots of factors involved when your credit score is calculated. Do not be under the perception that only making timely payments will keep you at bay of the credit tornado.
Despite of you being at your best to be financially adhered, you cibil score can still see a dip due to no fault of yours. As we know, every financial transaction you make is recorded and stored with the credit bureaus and the credit bureaus sometimes tend to make mistakes and post wrong entries towards your account. This may be the reason why your credit score is not going up from time to time. To investigate such a case, you will have to get your cibil report and check for any errors, if you find any errors on the report, you can raise a dispute towards the transaction with necessary documents to prove if that is an error. This may take very long time but you will have to hang around just to rectify their mistake and get your cibil score up in no time.
There are instances when you run into unexpected problems and miss on making payments to the lenders. Some people take a hard hit mentally when they have skipped a payment and they always think of making the payment of the skipped account first keeping the active accounts on hold.
For example, if you have 3 active loan accounts say a personal loan account, a credit card and a consumer durable. For some personal reasons, you default on making the payment for personal loan and you start getting harassment calls from the collection agencies. Just to dodge this crisis, you plan on skipping your credit card due and make the payment for personal loan EMI with the penalties associated to it. What you do not realize is that, the damage is been done on your credit report and the damage will be healed with time, even if you are making the personal loan payment the credit report will still show your default.
So do not fall for this and set your priorities when making payments.
If you are holding any credit cards, make sure to use minimum of it. As using high credit limit also can hit your cibil score. The ideal utilization should not be more than 20% of your credit limit. If your limit is 1 Lakh and you are using 50k out of it, then you may see a dip towards your credit score.
It is good to be prepared on what may come in your way and get your cibil score up.