Are you planning to apply for a new credit card but struggle to get a credit score good enough to procure a card? Well, you are not alone. This problem is quite prevalent.
There could be a lot of reasons for the poor credit score, also known as CIBIL score. And once you know the reason, you can very well fix it. First and foremost, you need to get access to your credit report and spot the inaccuracy (ies), if any.
Alternatively, you may have missed paying your credit card bill, or skipped your loan EMI. Or perhaps you have just started to earn and have not yet built a sound credit score. But there is nothing to panic about.
Here we share some of the suggestions that you can follow in order to improve your credit score before you apply for a new credit card.
1. Pay your outstanding bills on time: Making delayed payments can considerably affect your credit score. So, it is recommended to pay bills on time which include credit cards and loans.
2. Avoid new credit inquiries: Every time you make a new credit inquiry, your credit score suffers, albeit marginally. So, it is recommended to avoid a new credit inquiry unless it is absolutely essential.
Merely checking your loan-seeking ability out of curiosity is not a recommended practice since it affects your credit score.
3. Try to maintain old accounts: The longer an old credit account is maintained, the better it is. Just because you are not using an old credit card, you should not ideally close it. It is, therefore, important to remember that as you close your old credit account, your credit limit suffers.
4. Secured credit card: A secured credit card is the one that you get by keeping the equivalent amount of money as collateral. It is a good and recommended way to build a sound credit profile.
5. Reduce your credit card debt: It is recommended to keep credit card debt under 30 percent of the total credit card limit to maintain an ideal credit utilisation ratio. For instance, if your credit limit is ₹10 lakh, try to keep your credit debt under or around ₹3 lakh.
6. Regularly checking your credit report:It is important that you check your credit report on a regular basis i.e., at least once a year. Upon checking the credit report, if you find any mistakes, you can surely rectify them.
However, it is vital to note that these suggestions are only indicative and not exhaustive. There could be some other workable tips that work better in your case and therefore could help improve your credit score before applying for a credit card.
