What to do if your credit score gets reduced considerably? A low credit score can result in rejection of loan applications and can increase your interest costs. But wait; there is no reason to panic or stress. Your credit score can be fixed and that too, without any cost. All you need is to follow a disciplined approach of constant improvements and assessment.
Therefore, we have come up with some of the absolute ways of preventing your credit score from reducing it further and improving it with time:
Avoid taking any kind of Loans
Your net worth lies in the assets you have minus your liabilities. Reduction in credit score is usually comes with a reduction in your net worth. Therefore, do not reduce it further by taking any kind of loan. Keep a fixed target as far as your credit score is concerned and then eventually apply for an instant loan or a personal loan when your credit score hits 720. So if you are looking to get instant short-term personal loans, make sure that your credit score is high.
Minimize Credit Card Expenses
The utilization of credit card is a significant part of your credit score. With an increase in your utilization percentage, your credit score decreases. This is because financial institutions assess you as credit hungry and they usually avoid giving more loans or credit cards to you. Hence, it is advisable to move your credit card expenses to your debit card until and unless your credit score improves.
Repay your EMIs on time
Delay in paying your loan EMI is the biggest reason for your credit score to dip. On every EMI or credit card payment that you miss, the bank or the financial institution reports it to the credit bureau which shows your credit report in red or orange color. Therefore, you must pay your EMIs and credit card bills on time. Your credit history or score cannot be changes, therefore, make sure that your core isn’t painted in red colors.
Keeping in mind all the above tips, make sure that you check your credit score at least once in a quarter. Once you meet your target credit score, you can relax for some time and continue with your expenditures that you once stopped. But the bottom line is not to forget continuous monitoring of your credit report.