Build Your Credit Score: Tips From Anushka Rathod

In today’s India, a good credit score is like a golden passport. It unlocks access to loans, credit cards, and other financial products with better terms and lower interest rates. But for many, especially young adults or those new to the credit world, building a strong credit score can seem like a mystery. Moreover, Financial influencer Anushka Rathod has some tips to help you out! Did you know she was included in the Forbes India 30 under 30 List this year?

The first step is establishing yourself as a creditworthy borrower. Besides, This means obtaining a credit product like a secured credit card or a small loan. Secured options require a deposit that acts as collateral, minimizing risk for lenders. Furthermore, Timely payments on these build a positive credit history.

This is the golden rule of credit score improvement. Missed or late payments are the biggest culprits for a bad score. Besides, Set up automatic payments or reminders to ensure you never miss a due date.

Credit utilization refers to the amount of credit you’re using compared to your total credit limit. Ideally, aim to keep this ratio below 30%. However, Maxing out your credit cards sends a negative signal to lenders, suggesting you’re overextended.

You’re entitled to a free credit report from credit bureaus like CIBIL or CRIF every year. Moreover, Regularly check for errors or discrepancies that could be lowering your score. Dispute any inaccuracies promptly to maintain a clean report.

Having a mix of credit products, like a secured credit card and a small personal loan, shows responsible credit management. However, avoid applying for too many credit products in a short span, as this can be seen as credit hungry behavior.

Co-signing a loan for a friend or family member can be risky. If they default on payments, it will negatively affect your credit score as well. Furthermore, Only co-sign for someone you trust completely and understand the potential consequences.

Improving your credit score is a marathon, not a sprint. Consistent responsible credit behavior over time will gradually lead to a higher score. Moreover, Don’t get discourage by slow progress; stay focused on your long-term financial goals.

Additional Tips:

• Become an Authorized User: Consider becoming an authorized user on a family member’s credit card with a good payment history. However, Their positive credit behavior can reflect on your report.
• Limit Hard Inquiries: Each time you apply for a loan or credit card, a “hard inquiry” is placed on your credit report. Besides, Too many hard inquiries within a short period can lower your score. Moreover, Plan your applications strategically.
• Maintain a Long Credit History: The longer your credit history, the better. Moreover, Avoid closing old accounts unless they have high annual fees or are inactive.

By following these tips and practicing responsible credit management, you can build a strong credit score that unlocks a world of financial opportunities. Remember, a good credit score is an investment in your financial future, so start building yours today!