How to Increase Credit Score to 800?
In India, a good credit score is crucial for financial well-being. Credit scores in India typically range from 300 to 900. A score above 750 is considered excellent. Hence, maintaining a credit score above 750 in India is essential for several reasons. When you apply for a loan (personal loan, home loan or car loan), lenders carefully examine your credit score, they use your credit score to assess your creditworthiness. A score above 750 significantly improves your chances of loan approval. It demonstrates your creditworthiness and responsible financial behavior.
Your credit score directly impacts the interest rate you’ll pay on loans. A higher score translates to lower interest rates, saving you money over the loan tenure. Conversely, a lower score may lead to higher interest charges. A good score leads to lower interest rates on loans. It saves you money over the loan tenure.
A strong credit score is required to get better credit card offers. Premium cards with several offers like cashback, travel rewards and lounge access often require a score above 750. Having a good score suggests that you can get access to credit facilities anytime you need.
A higher credit score gives you negotiating power. Whether it is for favorable loan terms, tenure or interest rate, you have the power of negotiation with a strong credit score. Lenders, banks and even employers may check your credit score in order to check your creditworthiness. A strong score reflects your reliability in managing credit in a better way and repaying debts on time.
While applying for a credit, a credit score of 750 is considered a good score by the banks and the lenders. Even though, if you want to increase your Credit Score to 800, here is a guide for achieving your goal. This will help you to increase credit score by 100 points.
Better Management of Credit Utilization
Credit Utilization is arrived at by dividing your outstanding loan by your credit limit. Maintain Credit Utilization below 30% to 40%.
Avoid Multiple Loans
You must avoid applying for Multiple Loans at the same time as it negatively impacts your credit score. In fact, you should not apply for multiple loans during a short period of time.
Maintain Consistent Repayment Track Record
Always maintain a consistent Repayment Track Record with timely repayment of all the dues whether it is an EMI or Credit Card Bill.
Do not go for Unsecured Loan
You must avoid taking unsecured loan in order to increase your credit score. Always avail secured loan as it raises your credit score.
There should not be too many enquiries
Though 'free credit score' or 'free credit report' is being offered by many websites, you should not make too many enquires even if it is available free of cost. Too many enquiries has a negative impact on your credit score
Raise your Credit Limit
If you are offered to increase you credit limit by your bank or lender, you must go for it and avail higher credit limit as it will lower your Credit Utilization Ratio.
Don't avail Credit during Dispute Resolution Period
If you find any discrepency in your credit report, your credit report may be disputed with credit bureau immediately which is resolved by the financial institution as soon as possible. Never go for availing credit during Dispute Resolution Period.
Timely Payments
Set reminders for EMI payments to avoid delays. Paying on time positively impacts your credit score.
Avoid Co-Signing
When you co-sign, you become equally responsible for the loan. Any missed payments affect both parties' credit scores. Lenders also consider co-signed loans as your financial obligation. So avoid co-signing loans so that it will not affect your credit score.