Ways to boost your credit score

Low credit score is something which is not welcomed by the lender and as a customer you may face a lot of issues while getting a credit from the lender. Either you won’t get any credit or even if you get it, you would be paying a huge premium in terms of interest. So, following are some ways in which you may boost your credit score.

Automate your payments
To be in the good books of lender and maintain your credit score, you should try not to miss out on any debt payments. You can avoid such delayed payment or missing out on payments by automating such payments. You can give standing instructions to the bank to auto debit from your account any such credit card balances on a given date. This will help you to not only boost your credit score but also avoid any unnecessary use of credit.

Increase in credit amount
Increase in credit amount is a way to boost your credit score. While calculating your credit score your credit utilisation ratio is also taken into consideration. The credit utilisation ratio is nothing but how much credit is available and how much credit you have utilised. Lower the ratio better it is. So, a gradual increase in the credit amount would help you to bring down your credit utilisation ratio, provided your utilisation doesn’t increase. Though from a personal finance perspective this is not one of the efficient ways.

Avoid keeping more credit balances
To increase your credit score you need to keep your credit balances low which would ensure an increase in your credit score. Try to minimise the use of credit card to lower your credit card balances and once the score is improved, you should promise yourself to use the credit card diligently and avoid piling the credit card balances. Doing so would not just help you to boost your credit score, but also help you manage your cashflows efficiently and at the end, have a good amount of investible surplus to help you fulfil your financial goals.