SMEcorner | 10 Apr, 2018
The moment when you first take a loan or get a
credit card, you start accumulating credit. That is the easy part.
Staying in control and being aware of your credit rating is tougher.
We all know the advantages of maintaining a good
credit score. You can achieve all your financial goals and also get
some amazing benefits of a good score, like lower interest rates on
loans and cards. You could also save money on security deposits for
utilities like your mobile or telephone connection.
This New Year, make yourself 5 promises to
maintain a high credit score:
-
Make
your payments on time
Pay all your bills on time. This isnât true just
of your credit card, but all your utilities and even small
business loans that you may have.All
payments get recorded and when you make payments on time, you come
across as a good credit risk for future lenders.Keep track of
payments, maintain a folder for all bills and stay on top of it.
Better still, initiate automatic payments so that you never miss any
payments. Just ensure you always have sufficient funds in your
account.
-
Rectify
mistakes on your CIBIL report
You might be doing everything by the books, but
errors can happen. And these could show up as discrepancies in your
credit rating.Watch your credit report and check it regularly. Report
any inconsistency as soon as you spot them. Identity theft or credit
card fraud is also something that you need to watch out for.Errors
could affect your score hugely, and cause you an inconvenience and
also impact your financial plans.
-
Make
it a habit to say no to your credit card
Keeping your credit card balances low is crucial
to maintaining a good credit score. And itâs all in your hands.Your
credit balance should never be more than 30% of your credit limit,
even if you pay your bill in full every time. Credit card companies
usually report your balance at the time your statement is generated,
and thatâs when your balance is highest. This reflects badly on
your credit score.Limit the use of your credit card to maintain a
good credit score.
-
Study
your credit history to identify what you are doing wrong
On the off chance that your credit rating has
slipped and is below acceptable levels, stop a moment and study your
credit history.Understand what you could be doing wrong.Are you
paying bills on time? Even if you are, on-time payment accounts for
just 30-40% of your total. Perhaps the debt-to-limit ratio of your
credit card is too high.Or it could be that you have taken too many
small business loans
at the same time.All these factors combine to affect your credit
score. Study your patterns and rectify mistakes before they cost you
too much.
-
Consider
shifting your credits
If your existing loan is taking a toll on your
monthly budget and you find yourself struggling to make payments on
time, you could consider shifting your loan.The new loan could be
taken at lower interest rates, or you could work out a different
payment schedule. The ease of payment is anexcellent way to give your
credit rating a little shake.
SMEs in Indiahave many
avenues to maintain a good credit rating. It is now simply a matter
of taking advantage of those options.
*This article is contributed by Digikredit Finance Pvt Ltd , an NBFC, which operates under the name SMEcorner
