A low CIBIL score makes it difficult to get a loan at an affordable rate. Without a good credit score, it becomes difficult to get loan approval. Having said that, it proves how important a good credit score is for financial independence. Borrowing is a vital way to arrange instant funds for needs and emergencies. If you do not have a good online credit score, you are not able to enjoy the instant borrowing experience.
There are various financial and credit
activities that damage the credit score. However, in contrast to that, there
are activities that build credit too. If you are planning on a high-value loan,
you need to improve your score. What are the top reasons for having a low
credit score? How to improve it? How to check credit score?
Let’s find out in a detailed manner.
The most common causes of a low credit score
●
Poor repayment history:
Repayment history is an important factor in determining credit score.If you do
not have a clean track record of repayment, you will have a low credit score.
Payment is one of those factors that are considered important.
●
Higher use of credit
utilisation ratio: The credit utilisation ratio is the ratio between the total
credit limit offered and the credit limit utilised by the individual. It is a
bad credit habit to utilise 100% of the credit limit offered by financial
institutions. When you do so, it becomes difficult for you to get a good
credit score.
●
Multiple hard enquiries: Hard
enquiries are usually run by various loan providers when you apply for multiple
loan applications. At a single moment, if you apply for multiple loans, hard
enquiries damage your credit score. This is one of the most common reasons why
you have a low credit score. For Business Loan visit : business loan apply online.
●
Multiple CIBIL report errors
and comments: Credit report errors and incorrect entries are frequently the
cause of a low credit score.It is possible to get a low credit score even with
good credit habits. This is one of the probable reasons.
●
Mismanagement of credit mix: A
healthy credit score is dependent on credit mix. leads to credit score damage.
Boost your credit score
●
Pay your bills on time.
Maintain a healthy loan repayment history with a clean track record.
●
Even if you don't use your
credit cards, keep them open. The longer your credit history, the higher your
credit score.
●
Do not keep any outstanding or
overdue amounts pending on your bills and monthly installments.
●
Avoid applying for multiple
loans within a short span of time.
Summing up
How to check your credit score? Check your online credit score by visiting
the official website of Clix Capital. You get an accurate online credit score instantly, completely free of charge.
Must Read : Six
Obvious Reasons to Check Your Credit Score Regularly
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