If you don’t have a good credit score, it can be hard to get a loan or a credit card. Most banks would outrightly reject your application based solely on your credit score. However, it can be tricky to build a good credit score as well.
Starting with your first credit card, everything you do in terms of your finances can play a significant role in your credit history. To be able to build a good credit history, you need to handle your finances very responsibly.
Which is why we are here with tips and tricks to build a good credit score!
How to build credit for a New To Credit Individual?
A new to credit (NTC) individual is someone who has never taken a loan or a credit card before. If you are wondering how to build credit as an NTC, we’re here to help you out!
You can build credit with a credit card. Here’s how to get started:
Step 1. Get yourself a credit card:
Apply for a credit card for beginners. You can either apply online, or contact your primary bank. It is not very difficult to get a credit card for beginners. Your application should be easily approved if you have a valid bank account and have been maintaining a decent bank balance.
Step 2. Use your card to build your credit history:
Wondering how to build credit with a credit card? Well it’s simple! All you have to do is ensure that you pay all your bills on time and in full. Never delay any payments. Within a few months this will start to build a good credit history for you.
Step 3. Check your credit report a few months later:
You should check your free credit report online about 3 to 6 months after you get your credit card. Your card must reflect positively in your credit history by then.
How to improve credit score?
Got low credit score on your credit report? No need to worry! You can still take steps to improve your credit score.
Step 1. Start making all your payments on time:
Given you already have a credit score, you also must have a credit card or loan account running. Your score could’ve been affected by missed or delayed EMI payments on any of these credit accounts. So, from now on, ensure that you make all your payments on time, and not even a single day late.
Step 2. Pay off your credit card debt, if any:
If you have accumulated any credit card bills that are still unpaid, it is highly recommended that you pay these bills off immediately. Paying off this chunk of your debt could improve your credit score.
Step 3. Check your credit report for any errors:
The errors in your credit report can be the result of mistakes made by others. Which is why you should check your free credit report online and ensure that no errors exist in it. If there are any errors, then you should get in touch with your bank and raise the concern to get it sorted out.
Pro Tip:
If you are someone with a low credit score, you can also use a small amount personal loan to improve your credit history. A small amount loan should not be difficult to get. And you can improve your credit score by making all the payments in time. However, remember that this is more of a hack and you should only do this if you are in desperate need to improve your credit score.
With the help of these steps, you should be able to build a good credit score. Wondering why your credit score is important? You can read more here.
