Your credit score is one of the most important factors that lenders consider when approving your loan application. A higher credit score not only increases your chances of loan approval but also helps you get better interest rates.
1. Pay Your Bills on Time
Payment history accounts for 35% of your credit score. Set up automatic payments or reminders to ensure you never miss a due date.
2. Reduce Credit Utilization
Try to keep your credit utilization ratio below 30%. This means if you have a credit limit of ₹1 lakh, keep your outstanding balance below ₹30,000.
3. Do not Close Old Credit Cards
The length of your credit history matters. Keeping old credit cards open helps maintain a longer credit history.
4. Limit New Credit Applications
Each hard inquiry can temporarily lower your score. Apply for new credit only when necessary.
5. Check Your Credit Report Regularly
Review your credit report for errors and dispute any inaccuracies immediately.