Many times it also happens that even after all the documents are correct, the loan is not available, due to which the banks attribute the bad credit score.
If you also do not pay the loan or credit card EMI on time, then your credit score will also get spoiled.
In such a situation, if your credit score has deteriorated, then let us know here how to improve it.
What causes bad credit score?
If you have taken a loan from a bank and are not able to repay its EMI on time, then in such a situation your credit score gets spoiled.
At the same time, loan settlement, loan default and non-payment of credit card bills on time also result in bad credit score.
Apart from this, if you have become a guarantor of a loan and it has not been repaid, then even in such a situation the credit score is bad.
How is credit score calculated?
The credit score is calculated between 300 and 900 numbers, of which 750 or above is considered a good credit score. Credit score is calculated on the basis of 24 months history.
Timely EMI payment required
Loan or credit card bills should be paid on time, so that the credit score remains good.
If you do not pay EMIs or bills on time, then late fees have to be paid , which has a negative effect on your credit score.
Apart from this, you should not close your credit card account in order to improve your credit score.
Even if you do not have a single credit card/loan, your credit score will not be good.
Keep these things in mind for a good credit score
- Keep checking for deficiencies in the credit report.
- Keep trying to improve your credit balance.
- Joint account holders should be avoided.
- One should avoid taking multiple loans at a time, so that there is no financial burden.
- Credit card should be used to the limit.
- One should choose a long term loan so that the money can be easily repaid.