How I Increased My Credit Score From 668 To 768 In 2 Months
I check my credit score 2-3 times in a year as it is an important metrics of creditworthiness and a score can that make or break a good loan deal with the bank.
Banks charge a high rate of interest if you have a bad credit score.
Once you approach them for a loan for your requirements such as home loan, car loan or personal loan they check your credit score.
If it’s below 750 they can deny you a loan or charge a high rate of interest.
Many people don’t bother to check their credit score, but If you want to improve your financial situation and credibility you should always check your score and try to improve it.
I Checked My Credit Score
So coming to my experience with credit score, On January 2018 I checked my credit score with Experian and I was shocked to see that it was an unhealthy 668.
I was about to approach the bank for a car loan but thankfully I checked my credit score first, my score would have left a bad impression to the bank about my creditworthiness.
Banks could have denied my loan request and I would have felt very embarrassed about it.
So coming to my credit score, I immediately realized the dent in my credit score and I was trying to gain all knowledge about credit scores wherever I could find it.
I was juggling through newspapers and financial sites about how to improve it.
I downloaded my report description and was going through the report, no report mismatch was there and all the data seemed to be correct.
So, I was wondering how it went so low.
And I had A Default
Now after carefully inspecting, in one column I saw a credit card default of one of the bank’s cards I was using.
The default was a meager 1000bucks, it was a low credit limit card and Maybe I didn’t remember about paying remaining1000 bucks due(I admit it was completely my mistake).
The bank even might have tried to call me back but as my number got changed they couldn’t have reached me.
So they filed a suit with the credit bureau and it was an instant damage to my credit score.
Struggling to Repair My Credit History
I started thinking about credit repair and how to pay the due amount back.
I immediately called their customer care and offered them the amount due, they asked to me submit a cheque for the same and with the credit card no on the back of the cheque and put in one of their dropbox.
I did the same and I was hoping everything will become normal again.
I checked my credit score again in March and it was the same as previous.
I immediately read again about all the guidelines about credit scores but couldn’t find anything worthwhile.
I even tried the credit card banks customer care number but they couldn’t give any satisfactory answer.
And Got a Good Advice
One day I decided to visit my primary bank, I talked to a senior manager and he saw my loan portfolio and advised me to keep a balanced mix of a secured and unsecured loan portfolio.
Now for those who might not be knowing about unsecured or secured loans, simply saying unsecured loans are not backed with assets example are like credit cards and personal loans.
Secured loans are backed with some asset like the home loan is backed with home as an asset or gold loan is backed with gold or even a car loan is also a secured loan.
So I had no intention of getting a home loan.
For a Car loan, I might have been denied a loan or charged a higher rate of interest by the bank so I didn’t apply for it.
I Took A Loan
Finally, I decided to go with a gold loan.
I took the gold loan of about 1lac and I thought I would repay it as soon as I can, However, the bank Informed me that you can repay it only after three months without any penalty.
Fingers crossed, although I was not hoping lot much about improvement and I thought It would take time.
I just promised my self I would not miss my credit card payment and inform about any mobile number change to all my banks.
Also, I decided to pay the total amount due every time before the due date, So again I wouldn’t have so much trouble.
And To My Surprise, It Was 768 within 2 Months
I received a mail in August from paisabazaar.com that “Your Jul Credit Score has changed! View your monthly free Credit Report now”
I immediately opened the mail and to my pleasant surprise, it was showing a healthy score of 768.
I downloaded the whole report and again it was showing an increase of 100 points and my credit score was 768 wow! Such an amazing feeling after lots of hard work and learning too.
How To Increase Your Credit Score
So Here Are Some Great Tips On How To Have a Healthy Credit Score-
*Start your credit history as soon as you have even a small income, get at least one credit card.
*Pay your total due credit card balances within time.
*Have your credit utilization ratio below 30percent for your credit card,
suppose you have 1lac credit limit don’t use it for more than 30k.
*keep a healthy and balanced mix of a secured and unsecured loan.
*Pay your loan EMI on time even if it’s a very small amount.
So overall check your credit score periodically and develop a good financial discipline to maintain and improve it.