Super Simple And Smart Financial Tips For Women To Improve Credit Score

May 18, 2022 by No Comments

In order to establish your creditworthiness, credit bureaus compute a three-digit number that is referred to as your credit score. It has not only become one of the most important elements taken into consideration when analysing credit applications, but it is also becoming increasingly popular as a parameter for background checks by businesses. But despite the fact that women are increasingly making their presence felt in all aspects of life, they frequently end up mismanaging their debt obligations, resulting in a deterioration of their credit score.

So here is some helpful financial advice for women who want to boost their Equifax cibil score:

Ensure that loan and credit card payments are made on a consistent and timely basis

Your debt payback history is taken into consideration by credit bureaus when calculating your credit score in order to better understand how you manage your debt repayment obligations. Debt repayment includes making payments on your loan’s instalments (EMIs), as well as making payments on your credit card debt. Even if you currently have a low credit score, making on-time payments on your credit card debt and loan EMIs would undoubtedly help you to progressively improve it. 

The prudent use of credit cards for everyday purchases, as well as the prompt and complete repayment of credit card bills, will gradually improve your credit score without paying any interest. When you default, delay, or miss a payment, the lender reports it to the credit bureaus, which results in a reduction in your credit score as a result of the action. Hence, remember that regular and timely repayment of all debts will result in a gradual and steady improvement in Equifax cibil score, which you can even check on the free cibil score calculator.

Avoid making several direct loans or credit card applications.

Whenever you apply for a loan or credit card directly via the lender, the lender will request a copy of your credit report from the credit bureaus before accepting or declining your application. Such lender-initiated credit inquiries for your credit report are referred to as hard inquiries, and if you make a large number of these inquiries in a short period of time, you will be perceived as a credit hungry individual, which will lower or damage your credit score. 

Furthermore, lenders may fail to report account closures or repayments made by you to the credit agencies, resulting in an otherwise repaid debt being listed as overdue on your credit report.

Do not approach lenders directly, even if you are in desperate need of credit (a loan) or are considering prudently utilising a credit card to enhance your credit score to improve your financial situation. Think about visiting online financial websites because these platforms allow you to obtain your Equifax cibil score and report with a free cibil score calculator, as well as monthly updates, and credit inquiries made through these platforms are classified as soft inquiries and thus do not appear on your credit report or score.

Regularly inspect your credit score and report to spot errors or fraud.

Consumers have access to at least one free credit report in each quarter of the year because there are currently four credit bureaus operating in our country, and each of these bureaus provides one free credit report per year to all consumers who request one. Consumers can also explore accessing online financial marketplaces to obtain a free credit score and credit report, as well as monthly updates, as an alternative. If you do not review your credit score and report on a regular basis with the help of the free cibil score calculator, it is possible that an error on the part of a lender or credit bureau, or even a possible identity theft, will be overlooked, resulting in a decrease in your Equifax cibil score and a reduction in your chances of being approved for a new credit application.

Reduce your credit usage ratio to 30% or lower

It is the percentage of your total outstanding credit card balance compared to your entire available credit limit, which simply means the percentage of your total credit card limit that you have used. By utilising a bigger fraction of their total credit limit, many borrowers end up negatively impacting their credit score. Working women, in particular, who are often responsible for managing both their personal and household spending, may find themselves with a higher credit use percentage due to multiple expenses, which will reflect in the form of high CUR when you check it on free cibil score calculator

Such individuals’ credit scores are frequently penalised by credit bureaus because credit bureaus consider a high credit utilisation ratio to be a sign of credit-hungriness, and the likelihood of defaulting on future debts is higher when compared to individuals who have been managing their credit cards responsibly.

If you find yourself routinely above this 30 percent threshold, contact your credit card issuer to request an increase in your credit limit or consider applying for another credit card to lower your overall credit utilisation ratio.

Keep an eye on guaranteed loans.

It is equally responsible for the loan you co-sign or co-guarantor when you agree to act as a guarantor, jointly borrow, or co-sign a loan in order to assist someone in getting their loan application accepted. If the primary applicant fails to make any payments or defaults on a loan, your credit record will be negatively damaged, as well as the credit report of the defaulter. Both can check their credit score through a free cibil score calculator.

Remember, if your Equifax cibil score begins to decline despite your timely payments, take a second look at your guaranteed credit accounts, as the principal borrower’s repayment behaviour may be the source of the decline in your score. In the meantime, until your credit score improves or becomes strong enough, avoid guaranteeing any additional loans and assisting the principal borrower in making timely loan repayments if necessary. This will help to strengthen your credit score while also preventing any future decline.

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