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How To Build a Credit Score if You Have No Credit History

If you’ve never had a credit card or taken out a loan before, you’re not alone. Many people have never used credit from a bank or lender and hence have no credit history. You’re probably familiar with the term “CIBIL score”. Any credit agency in India needs your credit history to calculate your credit score. Don’t worry if you’ve never had any credit instruments before. It’s not too late to start building your credit score from the bottom up by following a few easy yet effective strategies.

Ways to Build Credit score

There are numerous ways by which you may build CIBIL score by fooling steps mentioned bellow.

Apply for a Credit Card 

The best way is to apply for a credit card right away. If you want to prevent the situation where you are considering asking for a loan in the future and are concerned about your poor credit history. Applying for and keeping a credit card is one of the quickest and safest ways to build a Free credit score. Research, evaluate, and choose the institutions willing to extend you a credit card despite your lack of credit history.

Apply for a credit card only once

It’s good to create a credit history as soon as possible. But applying for credit cards in several places will cause more harm than good. The reason for this is that every time you apply for a credit card, the lender will examine your credit record. So will be able to view all of your credit queries. Your credit score drops somewhat every time a lender looks at your credit report.

Read More: Can HDFC Regalia Credit Card Help You Save Money?

Continue to use your credit card regularly

It is impossible to earn a high credit score if you have no transactions or credit history. The essential takeaway here is to keep using your credit card regularly for things like gas, groceries, monthly expenses, utility bills, dining out, and so on. Spending on your credit card regularly will keep it active, but be careful not to overspend because this will boost your credit utilization ratio.

Maintain credit utilization ratio

When you first start using your credit card regularly and are new to the world of credit, your credit usage ratio is calculated and a section of your credit report is created. The credit usage ratio is the difference between the amount of credit you have available and the quantity of credit you use. This demonstrates that, despite being new to credit cards, you are not overspending and are being prudent with your spending.

On-time payment of EMIs 

Lenders send credit data to credit bureaus regularly, which is used to create your credit report and compute your credit score. As a result, missing or delaying one or more loan or credit card payments can severely affect your credit score. Keeping your payments on time and in full will help you earn a good credit score quickly.

It takes time to establish a credit history. It takes considerably more time to acquire a strong credit score. If you want to get and maintain a great credit score, just keep working toward it. The key to achieving and maintaining a good credit score is perseverance. Source link

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