People all around the world celebrate their love on 14th February. It is a celebration of loving everything that we care about. And since our finances are a critical part of our life. We thought why not take financial resolutions today and show some love to your finances and credit score? Here are a few financial resolutions that you should take today to improve your financial health-
Defaulting on your EMI or credit card bill payments will have a huge negative impact on your credit score. Hence you must ensure that you pay them on time. Credit bureaus collect this information from banks and NBFCs every month. So even a single default can cost you on your credit score. This also means that you end up with higher interest rates on loans.
When you apply for a loan or a credit card, the lender will run a check for your credit score before the approval process. This is known as a hard inquiry. Too many hard inquiries can take a toll on your credit score and thereby ruin your chances of getting approved at all. Make it a point that you check the eligibility of the lender before you apply and apply only if you fulfill all the necessary conditions.
The credit card company gives you the liberty to utilize some money and repay it later. But this does not mean that you should utilize that limit entirely. The ratio of money that you use from your credit limit and the credit limit is known as the credit utilization ratio which should be maintained at 40% at all times. This will help you maintain a good credit score.
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Last but not least, always monitor your finances diligently. Since checking your credit report is free, you should do it at least once a month. Doing so will help you keep a track of your credit score and will also come in handy to identify identity theft at the earliest. Make it a point to keep a check on your credit report.
So there you go, this Valentine’s day, give all the love you can to your finances and see how your financial health grows. If you have any questions related to personal finance, you can let us know in the comment section below. Until next time!
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