Keeping your credit score in the right range to get a home loan is essential for borrowers. So, you should maintain these responsible habits in order to improve your credit score.
- Make all your payments on time: Paying your credit card bills and loan repayments within the set time frame is favourable for your creditworthiness. And if you are falling behind on these payments, turn to your family and friends for short-term loans to help you meet the deadlines.
- Create a credit history: Those who apply for a credit for the first time find themselves in a lurch because of no credit history. And because of that, many lenders avoid such borrowers since they have no reliable information about their creditworthiness. To overcome this problem, you can open an FD, take a credit card against it and make timely payments on it.
- Distribute credit usage across different card limits: Your credit score also gets lowered if you use only one credit card extensively, but have more. Distribute your expenses over all your credit cards rather than using a huge percent on one card.
- Avoid unnecessary disputes: It’s okay to state your issues with customer care in case of increased interest rates, undue charges or fraudulent transactions, but disputing over late payment penalties should be avoided. Such behaviour can force the card issuer to freeze your credit card, which impacts your credit score badly.
- Keep track of your credit score before applying: When you plan to apply for a home loan, it’s best to check your credit score first to see where you stand in terms of finances. You can check if your credit score is in desired range to apply for a home loan and it also helps you to get an idea about the home loan amount you can avail and at what interest rates.
You can go to CIBIL website to check your credit score before applying for a home loan. You have to simply fill a form and pay a fee of only Rs. 470. By getting your credit score, you can also make sure that there have been no errors in maintaining your CIBIL score by faulty or invalid entries by your banks. By checking your CIBIL score, you can postpone applying for a home loan if it’s not in the desired range as well as build a better score eventually.