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How to Fix Your Credit Score Fast?

Credit score, a simple three-digit number that has become a significant part of our financial life based on our credit history. This magical number is crucial to check your creditworthiness. An individual personal credit score also determines the size of an initial deposit required by the person to obtain anything.

It is used to predict the possibility of you can pay your bills and how efficiently you manage your finances. Credit scores are used by lenders while giving you the credit, and if your credit score is very high, then you will qualify for a lender’s best rates and terms.

How Your Credit Score can impact You?

A person with a good credit score can obtain great deals while borrowing any credits as a home loan, car loan, and so on. On the other hand, if your credit score is very low, then getting these credits will become impossible. Even if you get a loan from any lender, they will charge you a high rate for that.

Fix Your Credit Score

A great credit score can save you a lot of money, while a bad score can make someone’s life more difficult and expensive. When someone applies for any type of loan or credit card from a financial institution such as Banks or NBFCs, it retrieves the credit report from one or multiple credit bureaus.

To assess the application, financial institutions analyze your credit report and it becomes an important factor for financial institutions to approve or reject the application. Having a higher Score, ease the process of getting your loan application approved with favourable terms.

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You should regularly check your Credit Report and Score and take appropriate action to maintain or improve your Credit Score. Many people know very little about credit scores and how they can improve their credit scores.

But do not worry anymore, here we are going to explain a few strategies to fix your credit score fast. So without any further delay, let’s get deeper into it.

What is a Credit Score?

A Credit Score is a three-digit number, which ranges between 300 and 900 and is calculated by several Credit Bureau by using your credit history.

The credit history of any individual covers details regarding all credit accounts, loan and credit card limits, loan EMI and credit card bill payment records, lender names, any default on a credit account, personal details, and so on.

How Credit Score is Calculated?

Different Credit Bureaus use their algorithm for calculating credit scores by using your credit history, which is then shared with the lenders.

Nevertheless, there are certain factors, which usually affect the credit score and if you can maintain these factors well, you will be able to fix your credit score to a good amount. Some of these factors are given below.

  • Timely repayment of loan EMIs and credit card bills
  • The level of utilization of your credit card limits
  • The total number of loan accounts and credit cards
  • The age of the loan accounts and credit cards
  • Settlement status of your loan accounts or credit cards
  • The total amount of the Unsecured Loans
  • The number of requests by moneylenders for your loan applications

How to Improve Credit Score Fast?

To improve your credit history you may need to take one or multiple steps depending on the current status of your credit history. Some of them are given below.

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Get Credit Report from all Credit Bureaus

Begin by getting your credit report, as your credit score is based on your credit report. You can request your credit report from all the available credit bureaus and review each one of them for verifying the accuracy of the credit report.

You should take a printout of the credit report if you are viewing it online to make the review process much easier. Mark all the changes needed as you go through your credit reports.

Check Your Personal Information

Look for all the personal information, especially the name that is not yours, identity card number details, Date of Birth mentioned, address, and so on. For any errors, you can request Credit Bureaus to fix these problems as soon as possible.

Pay Your Loan EMIs and Credit Card Bills on Time

Consistency is the key, so timely payment of credit card bills and EMIs are the most essential factor which impacts your credit score. Make sure you do not miss a bill payment or EMI due dates, as your score decreases if there is a delay in repayments. You can set auto pay options if you are paying your loans online to get rid of these issues.

Reduce Credit Card Limits Utilization

You may pay back your credit card bills on time, but the high usage of credit card limits can still indicate too much dependency on the available credit lines. As a result of this, the credit score gets negatively affected. To fix this issue, you should either reduce your dependency on credit cards or get the credit limits of your credit cards increased.

Stay Away from Multiple Loans or Credit Card Applications

Whenever someone applies for any loan or credit card with any Bank or NBFC, that financial institution retrieves the credit score and history from one or multiple Credit Bureaus. Based on your credit score and history, they evaluate your ability to repay the loans or credits on time.

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Each of these inquiries requested by any financial institution is recorded by the Credit Bureau where that particular inquiry was made. Therefore, if a financial institution detects multiple inquiries on your credit history, they may consider you to be less reliable in repaying on time.

Therefore, you should apply to only one or max two loans or credit card applications at a time.

Review your Credit Report Regularly & Check for any potential error

You may have a very good score and history, in rare case scenarios, there can be certain errors present in your credit history due to wrong information reported by your lenders to the Credit Bureaus. As a result of these errors, your score can be reduced considerably.

For instance, suppose you have completely paid off a particular loan and closed that loan account, however, your credit report of Credit Bureau may still show it as unpaid. For these kinds of errors, you can either request a correction from any Credit Bureau or your lender.

Conclusion

So this was all about Credit Score and some of the effective ways to fix your credit score fast. Have a great credit score and get answers to your financial queries! If you wish to add anything new, feel free to share your views!

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