Does Credit Card & Personal Loan Help Credit Score?
Credit cards and loans either improve or lower your credit score. It totally depends on your carefulness of treating these options right that will allow boosting CIBIL score than decreasing the same.
Here are some ways you can use credit cards to uplift your credit score:
- Make payments with credit cards than cash. However, avoid purchases that you are not too sure about would fall into your budget to repay later.
- Keep expenditure in credit limit set. Do not expend more than what your credit card is allowed for by the provider.
- You should not opt for credit extension all the time, as it may be difficult to pay the bills otherwise, and then you may have to opt for debt consolidation.
- Pay your bills (electricity, phone, water, internet etc.) with credit cards. These bills may be lower than those resulting from buying material goods.
- In case you cannot repay the entire amount on the credit card, still make the minimum repayment as it will give impression to lenders that you do not have the tendency to default.
- Pay entire credit card bill when possible than choosing minimum repayments.
Following are the ways a personal loan can boost your credit score:
- Personal loan can be taken for any funding needs and begins at INR 1 lakh for borrowing. Most of the eligibility criteria are not that firm, however a good credit score is must as these loans is unsecured.
- You can choose a comfortable EMI scheme. The banks offer competitive interest rates. Pay regularly at intervals without defaulting.
- Your credit score will automatically get wings when you pay EMIs in time. Repaying personal loan can strengthen your CIBIL score by up to 100 points or more.