A credit score of over 750 ensures that an individual gets lucrative interest rates for their loans and a higher approval rate. Here’s a guide on how can one improve it
Ideally, a credit score over 750 opens financial benefits like lower interest rates and improved accessibility to credit. To increase the sucrose to around 600, an individual can focus on reducing debts, utilizing credit not so often, timely clearing the dues, diversifying credit card types, and tracking their credit report on a regular basis.
Here’s how you can improve your credit score number that depicts an individual’s state with credit. A higher score is equivalent to comparatively lower risk for lenders. The scale varies between 300 and 900. If one has a high credit score it will translate into better personal loan rates, better insurance rates and various other interest rates of different kinds of loans.
Meanwhile, a lower credit rate can translate into expensive loan rates, and make it hard for an individual to get loan sanction approval.
Steps To Improve Credit Score From 600 To 750
1: Borrowing Lower Amount: Huge debts can trigger financial stress along with a weaker credit score. It is recommended to make the minimum payment on the remaining dues on outstanding debts first then try methods to reduce overall debt eventually. This can usually be achieved by repaying the debts with higher interest rates first.
2: Lower Credit Utilisation: If an individual’s credit utilisation is less than 30 per cent of their credit limit, it indicates to the lender that one doesn’t necessarily rely on loans for their day-to-day needs. Thus, increasing the confidence.
3: Dues Clearance on Time: If an individual has a record of clearing their dues on time it is seen as a good sign by creditors.
4: Credit Distribution: A good mix of credit accounts including collateral-free loans like credit cards, personal loans and collateral-based loans like home, and automobile loans can help increase a credit score.
5: Monitoring of Credit Report: By actively monitoring the credit report one can track changes and impact of each transaction. This can also help spot any discrepancies, signs of identity theft and fraud.
How Does Credit Scores Work?
An individual’s credit score is calculated on the basis of multiple factors including payment history, credit utilisation, a mix of accounts, credit scores generated and some public record. However, credit utilisation, due to clearance records has the highest weightage when lenders analyse the credit score.