Overcome the Hurdle of a Poor Credit Score
In today’s digital world, having a good credit score has become more important than ever. A poor credit score can become a major hurdle in availing credit products like loans and credit cards, and can stand in the way of fulfilling life goals like buying a house.
Bad habits are often hard to change, but if such habits are spotted in time and replaced with a good habit, it can result in beneficial transformations, steering you towards a better future. This holds true not just for bad habits in general but also for financial indiscipline, which can lead to a poor credit score.
Reasons Behind a Low Credit Score
Generally, a low credit score is not the result of a single financial mistake but reckless handling of credit for several months. Poor credit management can include a combination of late payments, defaulted loans, failure to pay credit card bills on time and even bankruptcy.
There can be other reasons too:
• Unauthorized Credit Access: Unauthorized access to your credit, such as if someone fraudulently withdraws cash using your credit card.
• Low Credit Utilisation Ratio: Using a high percentage of the available credit limit.
• Non-payment or minimal payment of credit dues: Ignoring or making minimal payments on credit facilities.
Improving Your Credit Score
Fortunately, it is possible to improve credit scores over a period of time. Here is how you can do so:
• Monitor Your Credit Report Regularly: Keep track of your credit score and credit report frequently, as it will tell you the manner in which you are currently managing your finances.
• Make All Payments on Time: Pay your credit dues on time or before the due date.
• Wisely Utilise Credit: Make sure you use credit cards and other credit products judiciously, so as not to over utilise your credit limits.
• Seek Professional Assistance: If you have already suffered from a poor credit score, it would be best to seek professional help to repair it.
By practicing good financial discipline, you can avoid a low credit score and open the door to many opportunities in the future. So, take charge of your credit today and make sure it is at its best.