Before taking any loan, banks check your credit score. If it is weak, getting a loan becomes difficult. Factors such as paying EMIs or bills, using your credit card limit, and applying for new loans repeatedly affect your credit score. So, if your credit score has dropped for any reason, you can improve it by maintaining good habits. Here are 5 such habits: 1. Pay Every EMI and Bill on Time The most important habit for improving your credit score is paying your monthly EMIs and credit card bills on time. A delayed payment gets recorded in your credit history. Therefore, do not forget the payment due date; use automatic payments or reminders to stay on track. 2. Use Your Credit Card Limit Sparingly Having a high credit card limit does not mean you should spend the entire amount. The portion of your total available limit that you use is called “credit utilization.” According to CIBIL, high credit utilization makes lenders feel that you are entirely dependent on borrowed money, which can weaken your credit profile. 3. Apply for New Credit Only When Necessary Avoid repeatedly applying for new credit cards or loans just for cashback or joining offers. Whenever you apply for a new loan or card, the lender checks your credit report, which is called a “hard inquiry.” One or two inquiries do not make much difference, but applying multiple times within a short period can affect your score. 4. Close Old Credit Accounts Carefully An old credit card with a good repayment record can benefit your credit score. A long history shows that you have managed credit responsibly over an extended period. Closing an old card reduces your total available credit limit, which can increase your utilization ratio. However, consider closing it only if it is charging substantial unnecessary fees. 5. Check Your Credit Report Regularly You should check your CIBIL report regularly. The report contains details of all your credit accounts, balances, payment history, and inquiries made by lenders. Any unknown account, incorrect outstanding amount, duplicate entry, or unauthorized inquiry can be identified in time and disputed. Your Score Will Improve Through Discipline, Not Shortcuts There are no shortcuts to building a strong credit profile. Habits such as paying bills on time, using your credit card limit in a balanced manner, not applying for loans without need, keeping old cards active, and regularly checking your CIBIL report collectively help improve your score. Knowledge Box: What Are Hard and Soft Inquiries? Post navigation From total how many banks Subhash Chandra’s company took loan:HDFC Bank, Canara Bank, IndusInd Bank also looking to get money back apart from LIC HF
