When looking for a loan or any other kind of financial help from a lender, a credit score plays an important role as it indicates to the lenders both if you are a good or a bad borrower. A high credit score in India indicates that you can be a good borrower and you would be able to pay back the loan easily on time and the lender won’t go into a loss and on the other hand a low credit score can indicate that you’re a bad borrower and might land the lender in difficulties. Here we help you get a credit score of 800.
What Is a Credit Score?
The credit score in India is a number that is used to indicate a person’s creditworthiness. The higher the number the better the borrower looks in the eyes of potential lenders. It is reported by the three financial credit reporting agencies that keep an eye on your financial activities. The scores are based on the scale by FICO (Fair Isaac Corporation) that has assigned a scale which is followed by most of the financial institutions.
What’s the Range of Credit Scores?
|Poor to Excellent Credit Score||Credit Score range|
|Poor||300 to 579|
|Fair||580 to 669|
|Good||670 to 739|
|Very Good||740 to 799|
|Excellent||800 to 850|
How Does a Credit Score Above 800 Help You?
Having a credit score over 800 might be a bit hard to achieve but that can provide you with many benefits and can be worth the effort. It’d help you save a lot of money on interest and has many more benefits. These are:
- It gets easier to get a loan or any financial help from lenders when you have a high credit score. The high credit scores make you more capable of borrowing and repaying a loan.
- A credit score above 800 would help you get a loan at a much less interest rate than the usual loans. A person with a low credit score might have to pay higher interest rates on the same loan. This is a method used by lenders to reduce their chances of losing money.
- You would get more time for repayment of the loan as the lenders find you a better borrower than those with a low credit score. Your high credit score indicates that you would always repay the loan and would not lead the lenders to a loss.
- You save a lot of money when you have a credit score above 800, as all the best schemes are available for such customers. The best interest rates and repayment time is provided to those with a high credit score.
How To Get a Credit Score of 800?
Now, it is not possible to quickly increase your credit score in India but it is not that hard either. It does take some time to understand and know the methods that work you up the scale and once the financial habits are practiced, it takes some time for the scores to go up. You have to be consistent with all the practices that would help you increase your score above 800.
Some of the steps that you can follow to increase your credit scores are:
1. Pay Bills on Time
You should make a habit of being able to pay all the bills on time and also never miss a payment. A payment that is a month late can reduce your score by as much as 100 points.
2. Don’t Use Much of Your Credit Limit
It’s always suggested that you don’t use up more than 30% of the credit limit of your card as it indicates that you are desperate for credit and need credit more often than you can pay off. Try to keep it as low as possible.
3. Have a Longer Credit History
The more transactions you have on your report the better it is for a higher credit score.
4. Try to Include Non-Credit Bill Payments In Your Credit History
See if your non-credit bill payments count towards your credit history, and if it does then be sure to pay those off on time and never miss a single payment as that can cost you many points on your credit score in India.
5. Get a Credit Builder Loan or a Secured Credit Card
Things like these are a good way of increasing the credit score in India as they give the lenders an assurance of you being a legit borrower and ensure that you are worthy of borrowing from them. A secured credit card has collateral already deposited into it before using it and a credit builder loan wants you to pay the loan amount before you use it. These methods help you get ahead with your credit score in India easier and faster.
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How to Maintain a Credit Score 800?
Now if you have maintained your financial habits then you would see an improvement anywhere from three to six months and in that period and after that, it’s necessary that you don’t do any such things that can affect your credit score in India negatively and drag down your score below 800
Some of the things to avoid to maintain a credit score above 800 are:
1. Don’t Apply for Many Credit Cards
If you are frequently applying for more credit cards and also using up more of your credit limit then this would impact your credit reports very negatively as the lenders would see you as a borrower who can’t manage their budget and constantly needs credit for the fulfilment of their needs. This would drag you away from an 800 credit score in India.
2. Pay Bills on Time
So, this always applies that you should always have your bills paid on time and never miss any of the payments, following this would help you maintain a good credit score in India all over.
3. Don’t Close Any Credit Cards
As you can use all your credit cards to distribute your credit in such a way that maintains the lowest credit utilization on each of them. You can distribute your credit utilization in a way that all of your cards have the lowest possible utilization. This would help you maintain a credit score above 800.
These are some of the ways by which you can increase your credit scores up above 800 and maintain them afterward.
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Frequently Asked Questions:
Why should I have an 800-credit score?
The higher credit score you have, the easier it will be for you to get credit.
Can having a credit card reduce my credit score?
Yes, if you do not pay your credit card bills on time.
Is taking a loan bad for my credit score?
Not if you pay the installments on time.
What to do if I have a low credit score?
Build credit through some banks / cards that are specifically for that, and have a longer history for credit.
How to check my credit score?
Only check from legitimate sources. In India, it is – Experian, CIBIL, Equifax, and HighMark.