Easy Tips to Improve Credit Score. Poor Credit Score is the biggest headache while applying for a bank loan. Everyone knows about credit scores. It is an index publicly accessible to evaluate the borrowing limit for an individual or his repayment capability. It depends on the previous history of loan repayments. If you have made numerous defaults in repaying your housing loan, personal loan, car loan or any other debts, the same might have already affected your credit score.
The positive fact is that even if you have a bad credit score, there are tips to improve the credit score and become eligible again to get loans. With a poor credit score most banks will reject loan applications. Even if they agree to offer a loan, the interest rate they demand will be high. Banks can legally charge higher interest rates if you have a bad credit score. A credit score less than 750 will definitely put you in trouble. We would like to help you with some Easy Tips to Improve Credit Score.
The Easy Tips to Improve Credit Score
Imagine that Harshan has a credit score of 650. However, he is planning for a housing loan in two years. Now Harshan’s only option is to improve his credit score. In this case Harshans requirement is not immediate. He has 2 years’ time to improve his credit score. In this case we will introduce an Easy Tips to Improve Credit Score. Harshan can take a gold loan of 60000 from a nationalized bank. Since it is a gold loan, and the bank gets ample security, the loan will be processed immediately without considering the credit score.
In the upcoming months, he needs to repay the amount as per the tenure of the loan from the same amount. He will need to give interest as per rule. This should be considered as the price that Harshan pays to improve his credit score after a tenure of one year when the entire loan is repaid. His credit score increases drastically. If he does this process for 2 years, his credit score will reach 800.
Beware of Small Loans, they too can damage your credit score
Also be aware that even loans from private banks will add to your credit score. Even if the repayment date is skipped by a day, credit score will be affected. Many people believe that small loans for which the PAN details are not given won’t be considered for credit score calculation. This is also a false thought. The ID proof, the name, Pin code and similar detail will ultimately map the default account to your credit score. This means that even if you have a loan for a small about which is defaulted, credit score will be impacted.
Taking gold loan is easy as people will always have reserve gold in India. Since the security of gold is a big plus for the bank, most banks are eager to offer gold loans.