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How To Boost Your Credit Score In 2019

Adhil Shetty


Your credit score may seem like a simple 3-digit number, but can affect your wallet in a big way. While a good score catapults your savings, a low score depletes them. Since your score reflects your credit history, existing debt, and credit behaviour, it plays a huge role in the terms lenders offer you while offering you a loan. So, this 2019, chalk out an actionable plan to boost your credit score and get the best deals possible. Here are 7 steps on how you can go about it.

Check Your Report And Analyse And Fix Errors

You can access your credit report once a year without any charge from agencies like CIBIL and Experian. Utilise it to see where you’re falling short. This way you can tackle the sections that need improvement. For example, you may be weak when it comes to making timely payments or you may be overutilising credit. Putting this right can immediately increase your score. Additionally, check to see that all your closed loan accounts and paid credit card bills reflect correctly. If something is incorrect, you can report it to the bureau. Correcting such inaccuracies will also increase your score.

Forecast Your EMIs And Plan Repayment Well

This year, you can make borrowing a more streamlined process to reduce chances of default, whether it is one EMI or an entire loan. This can also increase your score as you’ll be taking credit only when you actually need it and, with proper planning, pay your EMIs on time. If you have many existing debts, consider taking a debt consolidation loan to address it all in one chunk or repay the loan that charges the highest interest first. Cutting down on frivolous expenditure will help you do this with ease.

Automate Your Payments

If you often forget to pay your credit card bills on time or are consistently forgetting your EMI deadline, you can automate these payments via net banking or set reminders on a mobile app. This way, your score won’t plummet simply because you’ve been tardy.

Don’t Max Out Your Credit Card

Using up all the credit available to you is not in your best interests as it makes you seem credit hungry. So, rather than having one credit card and using your entire credit limit, consider taking two cards and utilising not more than 20-30% of the credit available. When you repay your credit card bills in full and on time, this will increase your credit score.

Don’t Apply For Credit Without Checking Your Eligibility

Making random credit inquiries or applying for a loan in the spur of the moment leads to excess credit inquiries, which causes your score to slump. Instead, check the eligibility criteria set by the lender of your choice, use an EMI calculator and only then apply for a loan.

Borrow Different Kinds Of Credit

Your credit mix also affects your score. If you have experience with only a secured loan like a home loan, consider taking a small unsecured personal loan and repay it on time. This will boost your score as it displays that you have experience with different types of credit.

Don’t Surrender Old Credit Cards

Lastly, remember that your credit score is based on your history with credit. While the last 12-36 months are essential to your credit score today, agencies also check your credit history going back over the last 20 years. So, if you have an old credit card that you have been using and paying off diligently, maintaining it is a good idea. This displays that you have a positive payment history and have experience with handling credit.

With these 7 steps at your side, you can increase your credit score this year and enjoy the perks!

The writer is CEO, BankBazaar.

BankBazaar.com is a leading online marketplace in India that helps consumers compare and apply for credit card, personal loan, home loan, car loan, and insurance.