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Let&rsquo;s face it: <a href="https://www.mymoneykarma.com/credit-scores/how-to-improve-credit-score.html">Increasing your credit score</a> does not happen overnight.&nbsp;
It&rsquo;s like going to the gym, wanting to lose all your unhealthy fat in a month!
Sorry, but that doesn't happen, and neither does credit score get a boost in a month.
Because of this, lots of people lose focus and motivation to keep on increasing their scores over the long term.
To help you guys out, here are some fun ways to do just that!
<h3 class="credit_i_h3">Get competitive</h3>
Are you bored out of your wits of checking the credit score each time? Well, you can make it more fun. Here&rsquo;s how to do it. Speak to your friends or peer group. Suggest a competition.
For instance, the one who increases their Credit Score first in the next few months wins. Have whatever reward you all agree on, or not. After all, it's all about you!
<h3 class="credit_i_h3">Celebrate small victories</h3>
One of the main reasons people get bored and lose focus is when they feel they&rsquo;re not making noticeable progress. To actually show yourself you are making noticeable progress, celebrate your small victories.
<img class="img-responsive credit_i_img" style="height: 640px; width: 960px;" src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1616130663312.jpeg" alt="To actually show yourself that you are making progress, celebrate even your small victories." />
For instance, you may be waiting to increase your credit score by 1000 points. But that takes time. So each time you increase the score by 10 points, celebrate your victories.
<h3 class="credit_i_h3">See the credit report as cheat codes</h3>
Don&rsquo;t see <a href="https://www.mymoneykarma.com/credit-scores/understand-credit-report.html">credit reports</a> be your enemy. Remember when you were a kit and you played video games? You loved using cheat codes, right? Well, your credit report is a kind of cheat code for boosting your Credit Score!
If you play the game smart and use your report well, you can easily remove the areas decreasing your score. Then you can focus on enhancing those areas which boost the score.
Each year, you are entitled to one free Credit Report. From these, you can learn about those elements that are pulling down your score. So focus on removing those first.
<h3 class="credit_i_h3">See credit report errors as your foes</h3>
What&rsquo;s the fun in a game if there are no enemies to bash, right? Well, from a Credit Report, you can see which those enemies that are decreasing your credit score are.
These can just be <a href="https://www.mymoneykarma.com/credit-scores/remove-credit-report-errors.html">errors in the credit report</a>. Within a short time, you&rsquo;ll become a pro in identifying these errors.&nbsp;
<h3 class="credit_i_h3">Use your special powers!</h3>
You have special powers to help you out in increasing your credit score. These are having the Ideal <a href="https://www.mymoneykarma.com/credit-scores/what-is-good-credit-utilization.html">Credit Utilization</a> Ratio (below 30%), and having a Diversified Credit Portfolio. Lenders shall love you for this!
Just use these tips, and you&rsquo;ll not just boost your Credit Score, but also have fun doing it.
Test Test Test Test Test

Credit score improvement becomes a problem for most because they find it tiresome and boring. What if you could make credit score growth interesting? mymoneykarma shows how. Test

Increase your Credit Score and Make it More Fun! Test

Your credit score is central to getting loans and credit cards. Need an emergency loan? Well, you need to have a high enough credit score. Want a credit card? You need that too. In fact, not having a high enough Credit Score and applying for loans will only damage whatever score you already have.

But how can you get loans and credit cards if you don’t have a Credit Score to speak of, or when the score is quite low? In this article, we are going to show you how you can increase the score. But understand that this is not magic. Your score won’t reach new heights overnight. It’s going to take time, but if you show sustained effort, you’ll get there!

<h3 class="credit_i_h3">Get a low-limit card from your bank</h3>

This is one of the best ways to build up your credit score. Get a low limit card from the bank where you already have an account. They will be most likely to give this to you when you are starting out. Now, since the card has a low limit, you are not borrowing much, and thus you won’t have much trouble in repaying the card. This easily builds up your credit score.

<img alt="Pay off your bills and dues and always remain under 30% of the credit utilization ratio" src="https://mmk-s3-cms.s3.amazonaws.com/1611317698941.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

That being said, it is also important to use the card responsibly to start with. Don’t use it to buy anything you come across. Don’t use it to buy high-priced items which you know you’ll find it hard to repay. Pay off your bills and dues and always remain under 30% of the credit utilization ratio. Keep doing all this for 6 months and you’ll see your credit score increasing.

<h3 class="credit_i_h3">Get a secured card or a secured loan</h3>

To get a secured card, you place a monetary deposit with the bank as security. When taking a secured loan, you give a more physical security like property. In both cases, you are more likely to get these lines of credit since these are of less risk to the lender. When such loans are approved for you, always pay the EMIs on time, and even before the time if you can manage it. All of your actions shall be reported to the Credit Bureaus, who in turn shall determine your Credit Score.

<h3 class="credit_i_h3">Buy something in installments</h3>

Wanted to buy that luxury item? Well, go ahead. Buy it with a loan, and then start repaying it back on time. But make sure it is something you won’t have any problem in repaying at all.&nbsp;

&nbsp;Now that you are seeing your Credit Score increase, it is important to maintain it. To ensure that you do this, make sure that you:

<ul class="banklogin_ul">
	<li>
	Don’t delay payments and EMIs
	</li>
	<li>
	Don’t ignore bills
	</li>
	<li>
	Don’t reach your credit utilization limit
	</li>
</ul>

It can be confusing when you are trying to enter the world of credit, with no credit history whatsoever. How can you build your credit score from scratch? mymoneykarma provides the answer.

Build your Credit History - How to Build Credit History from Scratch

Let's start with the very basics of the matter…

<h3 class="credit_i_h3">What is financial assessment?</h3>

Simply put, it is a check of your financial health. Financial health covers a lot of things like how much savings you have and how far that is towards your long term goals like retirement savings. It includes your credit score as well.

<h3 class="credit_i_h3">Why should you assess your finances?</h3>

When was the last time you started a diet or an exercise regimen? At the very start, you probably measured your weight for having a yardstick, right? Personal finance assessment is similar. You need to have regular check-ins to make sure that you are reaching your goals and that you are well on your way to save for retirement.

<h3 class="credit_i_h3">Why should you do it?</h3>

Experts say that assessing your finances before making big financial decisions like taking out a mortgage and getting married can save your life. Ideally, you should be assessing once a year. Let’s face it. Times, and your needs change. And that means your income and expenses change as well. At times like these, and during times of taking big financial decisions, you need to find out the current position of your personal finances.

<h3 class="credit_i_h3">You’re not on a budget. So what now?</h3>

Maybe you are just going on a day-to-day basis and managing your short term needs. That is fine, but you still need to be prepared for more.

<h3 class="credit_i_h3">How to do that?</h3>

Here are a few ways to do this. 
 
1. Retirement savings: Check your monthly contributions. Take full advantage of your company’s PF match, if it has one.

2. Meeting debts: Tackle your debts head on. There are debates on which debts to tackle first: ones with the most interest or one with the least interest. Pick one that suits you the best.

3. Budget based on income: Choose the 50/30/20 budget which says put 50% of income on necessities, 30% on meeting wants, and 20% on contributing to savings and debt repayments.

4. Building an emergency fund: At a bare minimum, you should have 6 to three months of savings for meeting any emergency.

5. Having a good credit score: Check your credit score regularly. The healthier it is, the more likely you are to get loans.

6. Insurance: Check that you have minimum coverage to protect yourself against loss. 
&nbsp;

Assessing your finances from time to time is an important aspect of keeping your money management afloat. mymoneykarma guides you through the basics of financial assessment.

Financial Analysis - A Short Guide To Your Financial Assessment

It hurts when your loan application is rejected. However, it hurts your credit score more than it hurts you. Getting rejected for a loan is bad for the score, not just for the short term, but for the long term as well. Getting rejected once increases your chances of getting rejected by other lenders as well. Yes, these things do get recorded in your credit report, and thus damage the score.

If your credit score is low, it can be due to a wide variety of factors. It can be due to debt settlements, on-payment of debts, not paying debt installments on time, high credit utilization, and much more. Thus, there can be many reasons for a low credit score.

The good news is that there are just as some ways to improve or increase it. But you won’t go into those points in this article. Here we shall detail out the impact of a rejected loan application on your credit score.

<h3 class="credit_i_h3">What is the credit score?</h3>

Your credit score is a 3-digit number that measures your credit worthiness, or how likely you are to repay loans. If the score goes down due to whatever reason, other lenders will see you are a risky candidate to give loans to.

<h3 class="credit_i_h3">Impact of a loan rejection on your credit score</h3>

Lenders make a credit inquiry each time you apply for a loan. This is known as a hard inquiry, which alone lowers your score if just a little bit. This is why experts warn not to apply at too many places at once for credit, as it only increases the risk of multiple rejections.

<img alt="If there is a loan rejection, ask the bank or lender why it was so." src="https://mmk-s3-cms.s3.amazonaws.com/1602767167397.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

Thus, be careful before applying for credit. If there is a rejection, ask the bank or lender why it was so. Ensure that you don’t make the mistake again while applying next time.

<h3 class="credit_i_h3">Reasons why your loan may have been rejected</h3>

There can be many reasons behind a loan rejection. To know the reason behind a loan rejection, and what is affecting the score, check your credit report. Here are the common reasons behind a low credit score.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Taking multiple loans: Do you have more than one loan account? If so, banks are more likely to refuse you loans and even credit cards. This is because they see you as one with an unstable personal finance since you are always in need of loans.
	</li>
	<li>
	Loans defaulted: Too many of these, regardless of whether it was solely your account or whether it was a joint-loan account, you will be penalized by loan denial later on. Banks don’t want to give loans to one who has defaulted on loans.
	</li>
	<li>
	Credit score remarks: Loan defaults are not the only problem which can lower your credit score. Did you make a debt settlement with a bank? If so, then your credit report now contains the remark “settled.” This makes it hard to get loans later. However, you can still get credit if you give security. Lenders are more likely to reject unsecured loan applications at this point.
	</li>
	<li>
	Employment status: Incidents of late salary credits and when the employer is not well-known to the bank can give rise to loan rejections.
	</li>
</ol>

<h3 class="credit_i_h3">6 things to do to raise your credit score?</h3>

Here are a few things you can do to get back on track. It’ll take time, but you’ll get there.

<ol class="homeloan_Faqs_ul_1">
	<li>
	&nbsp;Pay off all debts
	</li>
	<li>
	Have a low credit utilization ratio, below 30%
	</li>
	<li>
	Pay overdue bills
	</li>
	<li>
	Do not take multiple loans
	</li>
	<li>
	Get a loan tenure which suits you
	</li>
	<li>
	Get mixed loans
	</li>
</ol>

Follow these tips, you'll get over a loan rejection.

Credit score can go down for many reasons, and loan rejection is one of them. mymoneykarma tells you what needs to be done if that is the case.

​Loan Rejections Affecting Credit Score - All You Should Know

Did you know that you have a financial grade card? Lenders check it to assess whether you’re fit for borrowing money. But how do you score on this financial report card? Yes, we’re talking about your credit report and credit score. We help you calculate your Credit Score for free. Connect with us to explore a wonderful world of better credit opportunities.

A good credit score can give you access to various lines of credit along with excellent perks and benefits. Let mymoneykarma hand-hold you into the amazing world of credit with some great tips and tricks.

Credit score check: Know the basics of your credit report

Credit lines in our lives are very important. In many cases, it is essential. Credit is needed for almost anything: from buying a dream home, going on that foreign vacation you have always wanted, to give a much-desired family tour to your loved ones, to enjoy your life, to meet medical and monetary emergencies. The list goes on. There is no end to the benefits which a loan can give you. Anything expensive nowadays requires getting a loan.

<h3 class="credit_i_h3">Why is credit score important?</h3>

Just like credit is important, credit score is much more so. Credit score is a numerical representation of your previous credit behavior. It refers to how you had handled your previous loans. Did you pay on time, or were you always late?

Your credit score is given by the credit bureaus. A credit score is in the range of 300 to 900. The closer you are to 900, the better loans and credit lines you can get. A high credit score tells of your high credit worthiness, which in turn refers to lower risk for loan providers.

While you may understand how important credit score is now, perhaps some of you have a bad credit score. A bad credit score is below a certain level, due to which you may not get good loans or any loan for that matter.

If you want to buy a good product with a loan or credit, you may get disappointed and frustrated to know that lenders will not give you this.&nbsp;

However, there is good news. Credit score is not constant, and therefore can change for the better too! Your credit score is a number that changes according to your credit actions.

<h3 class="credit_i_h3">How to increase your credit score?</h3>

If some of your credit actions have resulted in the score sliding down, it can also rise up with the right credit actions. All you need is responsible and right behavior. Soon you will see your score going up again. Here are some of the most common things you can do to improve your credit score again.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Be regular with your existing loan and credit products
	</li>
	<li>
	Repay outstanding loan balances
	</li>
	<li>
	Focus on keeping credit utilization ratio low
	</li>
	<li>
	Get a fair mix or secured and unsecured loans
	</li>
	<li>
	Do not suddenly close off your old credit accounts
	</li>
	<li>
	Limit credit applications&nbsp;
	</li>
</ol>

As you can see, most of the options given above work for those who are pre-approved for credit products already. However, what about those who still find it hard to get any credit or new loans approved due to existing low credit scores? How can they get their scores up?

In this article, there are answers for that as well. Mymoneykarma is here to guide you to achieving the perfect credit score. Here is one good option for those with low credit scores, and who wish to build up the score: credit builder loan.

<h2 class="credit_i_h2">What is a credit builder loan?</h2>

A credit builder loan is one which is especially designed to cater to the needs of those seeking to improve their low credit scores, and for those who are new to credit.

<h3 class="credit_i_h3">How do Credit Builder Loans work?</h3>

Someone who has no or low credit score finds it hard to get any kind of loan. When they ask for loans, lenders tell them to get a good credit score first. However, the only way to get a higher score is by getting loans in the first place. So this vicious cycle just goes on and on. Fortunately, we have credit builder loans.

While there are other options like fixed deposits and secured credit cards, credit builder loans are the best, since in case of the other options a person may not have any securities to deposit for getting loans. In such situations, a credit builder loan is very useful. Even a <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Gold Loan</a> can be used as credit builder loans.

The main idea behind this financial instrument is to lend out small amounts that people can pay back easily in a short time, and therefore increase creditworthiness.

Credit builder loans are designed by and are available at many banks and other financial institutions. Here is how to get these.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Approach a credit lender who offers these
	</li>
	<li>
	Since you do not have an existing credit profile, or a bad one, the lender will see other points like social media profile and bank transactions to build up your credit profile, to help them making a decision to lend
	</li>
	<li>
	At times, banks may insist on lending just to those who have a account with them to reduce their own risk
	</li>
	<li>
	These loans are similar to personal loans, but the amount can be available since the loan is very small
	</li>
	<li>
	The tenure is shorter than normal personal loans, and ranges from 6 months to 1 year
	</li>
	<li>
	Once the bank disburses the loan, you have to start making regular EMIs
	</li>
	<li>
	When you pay regular EMIs, credit bureaus notice that and make improvements on your credit score
	</li>
</ol>

<h3 class="credit_i_h3">What are the many types of credit builder loans?</h3>

There are several types of credit builder loans available among the various lenders. Single lenders may not be able to provide all of these, though.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Pure credit builder loan: In this type, your loan is kept away in a locked savings account. You don’t have access to it yet. However, after you have repaid that loan with EMIs, the whole amount with interest is given back to the lender. Lenders may also charge a small fee.
	</li>
	<li>
	Secured credit builder loan: In this, the amount of your savings account is used as loan security. Till you pay the loan, you can’t access it. While the interest rate is lower, the savings account can’t be used until you repay the loan.
	</li>
	<li>
	Unsecured credit builder loan: This is the type that is commonly available. The loan amount is given and the borrower makes repayment as per schedule. However, it has a higher interest rate.
	</li>
</ol>

A credit loan builder is there for helping you increase your credit score. But at the same time, don’t forget that you still need to be responsible towards new credit after repayment of this loan, or your credit score will go down again.

&nbsp;

How does a credit builder loan work. How effective are they in improving your credit score? Get your questions answered at mymoneykarma.

What Is A Credit Builder Loan? | Types Of Credit Builder Loans

Two people - Payal and Rajat - approached the bank to get a personal loan. Payal's loan was approved while Rajat had to endure rejection.
Now, the question is, why did one get through while the other's plea was rejected?&nbsp;
That's where credit score plays an important role. If we dive deep, we would get to see that Payal had an excellent credit score, which made everything easier for her. Rajat's credit score, on the other hand, had taken a beating as he missed repaying his bills a few months ago. While Payal was diligent in monitoring her credit score, Rajat hardly paid any heed to it.&nbsp;
Your credit score is more like a report card where instead of letter grades, your financial decisions ends up within a scoring range.
Now, the question is&hellip;
<h3 class="credit_i_h3">Why Does Your Credit Score Matter?</h3>
A credit score is an all-powerful force in the strange credit world. It helps lenders determine your creditworthiness - how likely you are to repay your debt on time. Good credit is also vital in deciding your odds of approval for a loan at a lower interest rate. A low interest rate can make a notable difference to your savings.
Every time you set a financial goal, your credit score is likely to be a part of that financing picture. However, credit scores are not the only parameters lenders will look for.
<h2 class="credit_i_h2">What Are the Factors That Go into a Good Credit Score?</h2>
The fundamental factors that go into calculating a credit score are:
<ol class="homeloan_Faqs_ul_1">
<li>
Payment history, which accounts for 35% of your credit score
</li>
<li>
Credit utilization, which makes up 30% of your credit score
</li>
<li>
Credit age is used to calculate 15% of the score
</li>
<li>
Mix of credit accounts makes up 10% of the score
</li>
<li>
Recent <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">credit inquiries</a> affect 10% of a credit score
</li>
</ol>
<h3 class="credit_i_h3">Payment History</h3>
Late and <a href="https://www.mymoneykarma.com/credit-cards/things-to-do-if-you-miss-credit-card-payment.html" target="_blank">missed payments</a> can sink your credit score as they account for a significant portion of it.
When determining your score, the scoring model focuses on:
<ul class="banklogin_ul">
<li>
if you have recently missed a payment, or were <a href="https://www.mymoneykarma.com/credit-scores/how-late-payments-impact-credit-score.html" target="_blank">late to pay</a>&nbsp;
</li>
<li>
how many accounts you were late to pay&nbsp;
</li>
<li>
how many payments you missed or made late on each account
</li>
</ul>
To inch closer to a good credit score, improve your payment behavior and develop a clean payment history.
<h3 class="credit_i_h3">Credit Utilization</h3>
Your <a href="https://www.mymoneykarma.com/credit-scores/what-is-good-credit-utilization.html" target="_blank">credit utilization ratio</a> is the amount of credit you use against your total credit limit. So, if your credit limit is Rs 30,000, with a balance of Rs 12,000, your credit utilization ratio is 40%.
Maxing out on your credit limit will raise your credit utilization ratio drastically, which will bring down your credit score likewise. A good credit score requires the credit utilization ratio to be less than 30%.
<h3 class="credit_i_h3">Credit Age</h3>
Your credit age details for how long you have been using credit. To be precise, it's the average age of all accounts on your credit report. To establish a good credit score, you need a minimum of one line of credit on your credit report that is at least six months old.
<h3 class="credit_i_h3">Mix of Accounts</h3>
Account mix states the number of installment accounts and revolving accounts you have.
<ul class="banklogin_ul">
<li>
Installment accounts are loans, such as mortgages, auto loans, or personal loans, with a fixed monthly payment for a specific duration.
</li>
<li>
Revolving accounts consist of credit cards and lines of credit with an overall credit limit that you can charge against.
</li>
</ul>
A right mix of these accounts can push your credit score forward.
<h3 class="credit_i_h3">Credit Inquiries</h3>
If you apply for way too many lines of credit all at the same time, your credit score might have to endure a hard blow. Such applications result in hard inquiries, which can taint your credit report for up to 7 years. Although hard inquiries only make up 10%, to make the most out of it, try and minimize credit inquiries.
Now, you may have another question.
<h2 class="credit_i_h2">How Do I Improve My Credit Score?</h2>
If you have reviewed your credit report and discovered that it isn't quite where you thought it'd be, then you're not alone. Start by taking control of your financial future by improving your credit score.
<ul class="banklogin_ul">
<li>
Pay bills your on time - Repaying your debt timely will help you build a clean payment history. It will boost your credit score as it has the largest impact of all the factors in your credit score.
</li>
<li>
Use credit responsibly - Always try to keep your credit card balances below your credit limits, ideally under 30%. Credit utilization ratio has the second-biggest influence on your credit score.
</li>
<li>
Don't close all your old accounts - Keeping your older accounts open necessarily raises your average credit age. It will help you improve your credit score and bring down your credit utilization rate. Be careful when you <a href="https://www.mymoneykarma.com/credit-cards/dos-and-donts-of-credit-card.html" target="_blank">cancel credit cards</a>.
</li>
<li>
Don't apply all at once - Avoid applying for several credit applications within a short time frame. Such applications yield hard inquiries which can cause a small, temporary dip in your score.
</li>
<li>
Regularly monitor - You must track your credit reports to look for errors in your credit report.
</li>
</ul>
<h2 class="credit_i_h2">To Sum Up</h2>
Unfortunately, all of us don't start with a clean slate as far as credit scores are concerned. Thus, to build a good score, it takes time. So, be patient and keep a check on your credit behavior to sustain a good credit score. Not sure when to get started? Why wait? <a href="https://www.mymoneykarma.com/credit-score/credit-score.html" target="_blank">Check your credit score</a> right away!
&nbsp;

How to improve credit score is a question that many have in mind. This article from mymoneykarma will give you a clear picture on the know-hows of your credit score.

How To Improve Credit Score - Improve Credit Score

It is always important to understand what leads to a problem if you want to fix it. The same goes for a <a href="https://www.mymoneykarma.com/credit-scores/side-effects-of-bad-credit.html" target="_blank">bad credit score</a>. Factors that can negatively impact your credit score include <a href="https://www.mymoneykarma.com/credit-scores/how-late-payments-impact-credit-score.html" target="_blank">not paying bills on time</a>, having a balance on credit cards, and many more such reasons.
As these are capable of bringing down your credit score significantly, it is essential to identify and remedy such factors, while also checking for <a href="https://www.mymoneykarma.com/credit-scores/remove-credit-report-errors.html" target="_blank">credit report errors</a>.
<h3 class="credit_i_h3">What Is a Credit Score?</h3>
A <a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html" target="_blank">credit score</a> is a 3-digit number that indicates how well an individual has been managing credit - especially with regard to loans and credit cards. In India, it ranges from 300 to 900. The closer you are to 900, the better your chances are of getting loans and credit cards, especially at good terms and rates of interest. Conversely, if your credit score is in the lower range, you may not get any reasonable offers at all.
Your credit score is based on the information provided on your <a href="https://www.mymoneykarma.com/credit-scores/reasons-why-monitor-credit-report.html" target="_blank">credit report</a>, which is a detailed account of your credit-related behaviour. For lenders and banks, the score is quite essential, as it lets them know whether you are trustworthy enough to give loans to.
<h3 class="credit_i_h3">What Is a Bad Credit Score?</h3>
As said above, if you are a long way off from the 900 mark, it means that lenders will deem you less trustworthy. There are specific marks beyond which your score is considered to be a low credit score or bad credit score. Here are the credit score range categories:
<table class="table table-bordered credit_i_table">
<tbody>
<tr>
<td>
Score Range
</td>
<td>
Category
</td>
</tr>
<tr>
<td>
300 - 579
</td>
<td>
Poor
</td>
</tr>
<tr>
<td>
580 - 669
</td>
<td>
Fair
</td>
</tr>
<tr>
<td>
670 - 739
</td>
<td>
Good
</td>
</tr>
<tr>
<td>
740 - 799
</td>
<td>
Very Good
</td>
</tr>
<tr>
<td>
800 - 850
</td>
<td>
Exceptional
</td>
</tr>
</tbody>
</table>
<h3 class="credit_i_h3">Signs of a Bad Credit Score</h3>
<ul class="banklogin_ul">
<li>
Loans rejected or credit card rejected: If you have a low credit score, lenders will be less inclined to give you further credit. Hence, your loan or <a href="https://www.mymoneykarma.com/credit-cards/reasons-for-credit-card-rejection.html" target="_blank">credit card application being rejected</a> could be indicative of a bad credit score. After such rejection, however, you are eligible to <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_2064" target="_blank">get a free credit report</a> for checking.
</li>
<li>
Credit account closed by a lender: If you do not pay on time very often, lenders may write off your account as bad debt. If this happens to your account, it is a clear sign of a bad credit score.
</li>
<li>
Low credit limits, bad credit offers, and high APR: Even if some lenders are willing to give you loans, these loans would come with high APR and low <a href="https://www.mymoneykarma.com/credit-cards/increase-credit-limit.html" target="_blank">credit limits</a>. With a bad credit score, it is pretty much a given that you will not be getting good deals.
</li>
<li>
You get calls from debt collectors: When you get <a href="https://www.mymoneykarma.com/credit-scores/collection-account.html" target="_blank">calls from debt collectors</a>, it means you have debts that you have not paid back on time, which can significantly undermine your credit score.
</li>
</ul>
<h3 class="credit_i_h3">The Solution</h3>
If you notice any of the signs mentioned above, it is time to check your credit report to see what is wrong. Reviewing the report can tell you whom you have to pay, which accounts need more attention, etc. In case any of <a href="https://www.mymoneykarma.com/credit-scores/how-do-credit-bureaus-get-your-information.html" target="_blank">the credit bureaus</a> have made an error in calculating your credit score, checking the report can alert you to that as well.
The good news is that you can <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_2064" target="_blank">check your credit score</a> on the mymoneykarma website. As the service comes free of cost, you can use it regularly to keep a tab on your credit score. That way you can readily identify when and where your credit health needs repair.
<h2 class="credit_i_h2">To Wrap Up</h2>
Having a bad credit score is detrimental in many ways. You may not be able to get loans, credit cards, or any other form of credit.
mymoneykarma understands your problem. That is why we offer you affordable credit repair services. Once brought back up with the needed repair, your credit score will no longer be a hurdle to any of your credit prospects.
&nbsp;

A low credit score or a bad credit score can get loans rejected and credit cards rejected. Thus, you should check for credit report errors and avail credit repair services whenever necessary.  

When Do You Need to Use a Credit Repair Service?

Right now, it is a very tough time for those looking for personal loans. While not impossible, getting a personal loan now is an uphill battle. Personal loan applications which have a high interest rate and need no collateral, and which are sanctioned mainly on the basis of the credit history profile of the borrower, are being denied or turned down.

Other loan products such as home loans have the same story. Try asking for a home loan now. Chances are getting one will be tough.

However, all this does not mean that you won’t get any form of loans.

<a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">Gold loans</a> are doing quite well right now. Gold loan as a product is seeing its resurgence during this pandemic when all other forms of loans and lines of credit are not performing as before. During this time, the demand for gold loans has increased manifold. Another good news is that their interest rates are notably lower than other personal loans.&nbsp;

However, many people are still reluctant to give their gold to get a loan. In this article, we are going to tell you why despite RBI’s push, banks are still quite reluctant in lending out money, and what you can do to avoid a lender’s rejections.

<h2 class="credit_i_h2">Why are banks turning down loan applications?</h2>

<h3 class="credit_i_h3">Norms are more stringent now</h3>

From the beginning of this year, the RBI cut the repo rate several times. After such actions from the RBI, banks are now much more cautious of discounting higher NPAs. 
 
Generally, loans are sanctioned based on income, age, secondary income sources, credit score and even location of employment. However, in this economic situation, banks have a higher level of scrutiny when choosing borrowers. There are now more stringent policies on income sources and repayment capacity. Right now, banks can’t afford bad loans and non-repayments. The same is true even in case of loans where there is collateral. Instead, banks are preferring employees of large companies, in the light of which self-employed individuals are finding it hard to get loans. 
 
Even if you get the loan with security, the Loan to Value ratio will be moderate. 
&nbsp;

If you are a new borrower who has no credit history, you can bet your application will be rejected. After all, banks cannot yet trust your capacity to repay. Others who’ll suffer in this situation are those from industries like aviation, tourism and hospitality, and those who availed the <a href="https://www.mymoneykarma.com/trending-in-finance/index.html/moratorium-period.html" target="_blank">RBI’s moratorium</a>. 
&nbsp;

<h3 class="credit_i_h3">How to avoid loan application rejection</h3>

1. Pre-pay current loans ending in a few months: Banks are now more cautious, as we have seen. Under these circumstances, the best thing you can do is to pre-pay the last EMIs of current loans. Banks are now paying more heed to the FOIR parameter, or fixed obligation to income ratio. This means those loans which are about to close soon. 
 
2. Importance of keeping an eye on your credit score and credit utilization rate: As before taking any loan, you need to keep your eyes more on these parameters now. You need a <a href="https://www.mymoneykarma.com/loans/loan-against-gold-influence-credit-score.html" target="_blank">credit score</a> of 700 and above if it’s a private bank. Your credit utilization rate needs to be around 30%. These shall help in clearing away all your credit card obligations. 
 
3. Consider step-up loan: If you have just started your career, you know that down the line your income will increase, just like your EMI installment against the loan over a fixed tenure. This is what happens in case of a step-up loan. 
 
4. Take a joint loan to increase loan eligibility: If the second applicant is a working professional, you have more chances of getting accepted. 
 
5. Don’t apply for loans at too many lenders: Try secured loans like home loans instead. These have tie ups with mortgage guarantee companies. Applying at too many lenders makes your credit score go down.&nbsp;

If you use these 5 tips, you have more chances of getting your loan application accepted.

&nbsp;

Getting a loan approved is hard in these uncertain times. mymoneykarma is here to help with 5 ways in which you can assure your loan approval.

5 Tips To Get Loan Approved Faster | How To Avoid Loan Rejection

Payment history is the most important determinant of your&nbsp;<a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html" target="_blank">credit score</a>. A late payment carries almost 35% of weightage, and a single failed or missed payment can drastically bring down your credit score. Your current credit score, the delayed time in making a payment, and the frequency of missed payments together determine how much of a blow your credit score will take.
<ol class="homeloan_Faqs_ul_1">
<li>
Delayed or missed payments can stay on your credit report for up to seven years. It is removed after seven years provided that the amount has been repaid and the account is still active.
</li>
<li>
Late fees are added to late payments. Credit card APRs are generally quite high. If you drive your account into <a href="https://www.mymoneykarma.com/credit-scores/remove-negative-credit-report.html" target="_blank">delinquency</a>, there shall be a charge in the form of penalty APR, and you would end up paying much more than you had initially borrowed.
</li>
<li>
Failing a payment easily spoils your impression in the eyes of the lenders. They would lose their trust in your creditworthiness and increase your APR. If you were under any low-interest promotional scheme, those benefits might even be canceled.
</li>
</ol>
<h3 class="credit_i_h3">What Can You Do If You Have Made a Late Payment?</h3>
Listed below are a few things that you should do when you&nbsp;<a href="https://www.mymoneykarma.com/credit-cards/things-to-do-if-you-miss-credit-card-payment.html" target="_blank">miss a payment</a>:
<ol class="homeloan_Faqs_ul_1">
<li>
Try to Settle the Account ASAP: Pay the amount immediately when you realize that you have missed a payment. If not the full amount due, pay at least the minimum amount required.
</li>
<li>
Try for a Waiver: When you miss a credit card payment, an exorbitant late fee is added to your outstanding balance. You could avoid it by approaching the creditor and asking for a waiver. If you have a clean payment history and are careful to be polite enough, this could work. If you could, it would also help if persuaded the creditor to keep the negative information from the report that they submit to the credit bureaus.
</li>
<li>
Set Reminders for Yourself: If missing payments becomes repetitive, you better be more careful and find a way to remind yourself. Set reminders - it could be a wall calendar, cell phone reminder, or reminders through SMS/email.
</li>
<li>
Set up Autopay: If you are too lazy to follow up on the reminders, consider setting up automatic payments. Link your credit bill to your savings account and set up an automatic payment on a day before the due date. Also ensure that your account has enough money for the automated transaction.
</li>
<li>
Keep an Eye on Your Credit Reports: Stay alert and keep a check on how your late payments are affecting your credit score. Lookout for reporting errors. Use mymonekarma&rsquo;s <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1325" target="_blank">credit score tracker</a> to stay alert and updated.
</li>
<li>
Pay on Time Henceforth: <a href="https://www.mymoneykarma.com/credit-cards/pay-off-credit-card-debt.html" target="_blank">Pay bills quickly</a> to prove that you are responsible. If you can show that you are sincerely repaying your balance, your credit scores are more likely to improve. You must verify that the late payment was just an anomaly in your otherwise pristine credit history.
</li>
</ol>
<img class="img-responsive credit_i_img" src="../../../images/new/creditscore/how-do-late-payments-impact-your-credit-score.jpeg" alt="How Do Late Payments Impact Your Credit Score" />
By the way, did you know that you are entitled to one free credit score per year? That&rsquo;s right! There are some organizations that give you your credit score report once a year for free.
<h3 class="credit_i_h3">How Much Does a Late Payment Hurt Your Credit Score?</h3>
If once in a while you miss your payments and pay it within 30 or maximum 60 days, then it won't cause any lasting damage to your credit score. However, frequent as well as recent (in the last two years) payment failures can be detrimental. A payment delayed by 90 days or more can make your credit history to plummet and mess up your credit score for up to seven years. It indicates that you might repeat the mistake, and you become a risky borrower. Most credit bureaus follow this pattern:
<ol class="homeloan_Faqs_ul_1">
<li>
30-60 Days Late: If it is a one-time failure, the damages are less, and you can quickly revive. Recent 30-60 days delay causes the most damage, but it wanes off over time. However, if it happens often, the damage can be severe.
</li>
<li>
Ninety Days Late: This means severe damage to your credit score. The effects will remain for up to seven years.
</li>
<li>
120+ Days Late: If your payment gets delayed by 120 days, your debt will likely be sold off to a third-party agency. It could become a '<a href="https://www.mymoneykarma.com/credit-scores/collection-account.html" target="_blank">collection account</a>' or a 'charge-off account.&rsquo; Such circumstances significantly damage your credit report. Not only does it bring down your credit score, but it also adds a disparaging remark in the report.
</li>
<li>
Repossessions or Foreclosures: If you drive your<a href="https://www.mymoneykarma.com/home-loan.html" target="_blank"> home loan</a> or<a href="https://www.mymoneykarma.com/auto-and-car-loan-emi-calculator-in-india.html" target="_blank"> auto loan</a> account to a high level of delinquency, the blow to your credit score will last for seven years. A negative remark will be added to your credit report as well.
</li>
</ol>
<h3 class="credit_i_h3">How Long Do Late Payments Stay on a Credit score Report?</h3>
Late payments remain on your credit report for seven years. Yes, that is quite a long time. Worse still, if your credit score gets low enough, you may not get any new loans in the future. That&rsquo;s terrible news in case of emergencies.
<h3 class="credit_i_h3">How Can You Remove a Late Payment?</h3>
The easiest way to do this is by asking. This means asking your lender to remove the late payment off from your credit report. If they do this, it shall not be a problem for you on the credit report. For this purpose, you can call the lender or write to them. However, you need an excellent reason for this request.
The second way to do this is by negotiating with the lender. And it is entirely legal! For instance, if you are late on payments, you can propose to the lender that you wish to pay off all the remaining debt or loan along with additional charges immediately in return for the removal of late payment records from your credit report.
The third way to do this is quite simple. You pay the debt off to avoid any further trouble.
The fourth way is to hire a lawyer to fight your legal battles for you. This can come useful if the situation is entirely against you.
<h2 class="credit_i_h2">To Sum Up</h2>
Now that you know how harmful late payments can be, you should always be on guard. A little effort can save your credit from a lot of harm.
mymoneykarma can help you stay on top of <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1325" target="_blank">your&nbsp;credit score</a> - sign up with us and track your credit accounts with our effective tools.

How Long Do Late Payments Affect Your Credit Score? Should you even worry about late payment?  Go through this article to know more about this. Use mymoneykarma's tools to save yourself from potential payment delays.

How Long Do Late Payments Affect Your Credit Score

Want to know everything about your credit score? Want to know how to make it work for you? Read this ultimate guide from mymoneykarma to find out.

The Ultimate Guide to Credit Score in 2021 | Free Credit Score

Credit report and credit score are essential terms in the glossary of finance. I was unaware of them until last year when I had a conversation with my friend about taking a <a href="https://www.mymoneykarma.com/home-loan.html" target="_blank">home loan</a>. She asked me if I knew my credit score or had checked my free credit report recently. I had no answer. I had to ask her <a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html" target="_blank">what a credit score is</a> and why it is essential in the first place.&nbsp;
The Free Credit Score Mystery
She told me that a credit score is a three-digit number. It is determined by credit information companies (often called credit bureaus) by assessing the credit history of the borrower. It is calculated based on the reports submitted by the banks and other credit card companies in which the individual already has active credit accounts. The number can range from 350-900, and should be in the range of 600-800 to be considered healthy.
One can check his/her credit history through a detailed credit report issued by the Credit Information Companies (CIC). A borrower is entitled to get a free credit score report every year from each CIC, namely TransUnion, CIBIL, Equifax, CRIF Highmark, and Experian.
<h3 class="credit_i_h3">Is There Anything Like a 100% Free Credit Report Check?</h3>
Here, I asked another question to my friend - "What if I want to check my credit report twice, thrice, or maybe more than that in a year?"
She told me that it is possible to get a second credit report from these CICs, but I would have to pay the concerned charges. However, she also told me about another exciting way of getting a credit report multiple times a year - <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1333" target="_blank">through mymoneykarma</a> - for free!
mymoneykarma is a Fi-Tech firm, providing an online portal through which customers can have a 100% free credit report check various times a year. It assists them in improving their credit score by making them understand their credit situation.
Moreover, mymoneykarma helps its customers to compare their current <a href="https://www.mymoneykarma.com/credit-score/home-loan-credit-score.html?utmsrc=homeloan_enquiry" target="_blank">home loan interest rate</a> with the rates provided by other banks on their website. It also suggests and arranges for a <a href="https://www.mymoneykarma.com/loans/balance-transfer-vs-personal-loan.html" target="_blank">balance transfer</a> to banks offering more favorable interest rates. The tool helps customers in intelligent finance management.
<img class="img-responsive credit_i_img" src="../../images/new/creditscore/how-to-get-a-free-credit-report-from-mymoneykarma.jpg" alt="" />
<h3 class="credit_i_h3">How Can I Get a Free Credit Score Report from the mymoneykarma Website?</h3>
1. Visit the <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1333" target="_blank">mymoneykarma website</a>.
2. Fill in the required details like full name, date of birth, PAN, pin code, and the mobile number registered with banks to get an invite code.
3. Enter the verification code sent to your registered mobile number.
4. You will get a credit report on your screen with a detailed analysis of your credit history.
5. In case you already have an invite code given by an acquaintance, click on the 'I have an invite code' tab present in the top-left section. Provide the code to register on the website.
<h3 class="credit_i_h3">What Does a Credit Report Contain?</h3>
It comprises the following components:
<ol class="homeloan_Faqs_ul_1">
<li>
Credit score
</li>
<li>
Information about the demography (age, gender, name, and address) of the customer.
</li>
<li>
Records of current and past loans along with the credit history.
</li>
<li>
Details about defaults in payment and loans settled with banks, if applicable.
</li>
<li>
Details of <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">hard inquiries</a> made by banks upon receiving loan applications.
</li>
<li>
<a href="https://www.mymoneykarma.com/credit-scores/credit-utilization-ratio.html" target="_blank">Credit utilization rate</a> as per the card limits.
</li>
<li>
Delinquent accounts of the customer.
</li>
<li>
Age of credit history (since the time the customer has had credit cards and loans)
</li>
<li>
Consistency in making <a href="https://www.mymoneykarma.com/credit-scores/how-late-payments-impact-credit-score.html" target="_blank">timely payments</a>.
</li>
</ol>
<h2 class="credit_i_h2">To Conclude</h2>
<a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1333" target="_blank">Check your credit report</a> on mymoneykarma's intelligent finance tool at least once a month to know about the areas of improvement in your credit score. Also, learn more on how to <a href="https://www.mymoneykarma.com/credit-scores/how-to-build-good-credit-score.html" target="_blank">build a good credit score</a> and what to do if your <a href="https://www.mymoneykarma.com/credit-scores/credit-score-drop.html" target="_blank">credit score drops</a>.
&nbsp;

mymoneykarma credit report - credit report from mymoneykarma provided by Equifax. Learn more on how to get it in this informative article.

mymoneykarma Credit Report- How To Get a Free Credit Bureau Report

A few days ago, I applied for a home loan. It was rejected.

When I heard about it from the bank, I was shocked. I had submitted all the documents that were required to prove my ability to repay on time. I was very confident about getting approval for the loan as well.

When I approached the bank to know the reason, I was surprised to know that the reason for rejection was a <a href="https://www.mymoneykarma.com/credit-scores/index.html/side-effects-of-bad-credit.html" target="_blank">low credit score</a>.&nbsp;

<h3 class="credit_i_h3">What Exactly Is a Credit Score? What Is a Good Credit Score?</h3>

Now, before I could ask another question to the bank, I had to learn what a credit score is, as I was not exactly familiar with the term.

Turns out credit score is a number that ranges between 350 and 900, which is used to evaluate one's creditworthiness. Credit bureaus such as Experian, Equifax, and TransUnion determine it by assessing the financial history of a person through mathematical algorithms. A score of more than 700 is considered to be a good credit score.

Back to the Tale

I could not get the loan as my credit score was 550. It didn't meet the standard guidelines of a good credit score. Though I always paid my bills on time, there were a few mistakes in my credit history that I was unaware about! I was really disheartened, as this incident affected my plan of buying my dream home.

A Silver Lining

But if I look at the positive side, it led me towards in-depth research on credit score. I started reading articles on websites like mymoneykarma, which is a platform that not only provide free credit reports but also educates people on improving their credit score. Can I improve my credit score from 600 to 750? Maybe not in a month, but over time, yes. 
The website also informs you about the terms related to it. So, let's talk about the mistakes that you should not commit, and a few steps that you should follow if you are facing the same problem - a low credit score.

<img alt="How to Improve My Credit Score If It Is Below 600" src="../../images/new/creditscore/how-to-improve-my-credit-score-if-it-ls-below-600.jpg" class="img-responsive credit_i_img">

Mistakes That I Made

<ol class="homeloan_Faqs_ul_1">
	<li>
	I missed a few credit card bill payments.
	</li>
	<li>
	I never checked my credit report, due to which I was unaware of the fact that credit score plays a significant role in the loan approval. <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1335" target="_blank">Check your credit score</a> regularly.
	</li>
	<li>
	I had exceeded the credit&nbsp;limit of my credit cards.
	</li>
	<li>
	Multiple hard inquiries had affected my credit score severely.
	</li>
</ol>

These were all mistakes that I could have very well avoided had I been alert. Now, as I have discussed the most commonly occurring mistakes, let me also tell you how you can improve your credit score if you end up committing them yourself.

<h3 class="credit_i_h3">Steps to a Stellar Credit Score</h3>

<ul class="banklogin_ul">
	<li>
	Check Your Credit Score: Your credit report comprises the events in your credit history, which could affect your credit score either positively or negatively, depending on their nature. Check your credit score report for &nbsp;issues that raise potential red flags, as it will help you know where to improve. 
	In case there are any errors in your name, date of birth, email ID, or PAN, report it to the concerned credit bureau immediately and get the mistake rectified. Also, if there is any discrepancy in your loan or credit card account, inform the bureau without any delay. Henceforth, you can stay vigilant by checking your credit reports from time to time through the intelligent finance tool of mymoneykarma.
	</li>
	<li>
	Understand the Credit Report: When you check your credit score, remember that bad credit scores often reflect a history of credit flaws; such as late payments, defaulted or foreclosed loans, and even bankruptcies; on the credit report. Understanding the contents of a credit report can help you in rectifying the issues or mistakes that are reducing your credit score.
	</li>
	<li>
	Credit Utilization Rate: To evaluate the <a href="https://www.mymoneykarma.com/credit-scores/index.html/credit-utilization-ratio.html" target="_blank">credit utilization rate</a> on your credit card, divide the outstanding balance by the borrowing limit of your credit card, and multiply it by 100 to get the percentage.
	</li>
</ul>

Credit Utilization Rate = (Outstanding balance on the credit card / Borrowing limit of credit card) x 100

You can also use the same formula to calculate the credit utilization rate of all the credit cards that you have. It is advisable to keep the credit utilization rate below 30%, on a card-to-card basis, to avoid a drop in your credit score. A higher credit utilization rate indicates that the person has been overspending on credit cards and may not be able to pay the bills on time.

<ul class="banklogin_ul">
	<li>
	Apply for a Secured Credit Card: A secured credit card has a small borrowing limit.&nbsp; Banks generally issue it against a fixed deposit, providing the quantum of the loan or the credit limit at 80%-90% of the FD amount. Some of the credit cards offered against fixed deposits are SBI Unnati Card, ICICI Bank Instant Platinum Credit Card, ICICI Bank Coral Credit Card, and Axis Insta Easy Credit Card. Make regular payments while using the card. This is because the lender informs your credit activities to the credit bureaus.
	</li>
	<li>
	Reduce Credit Activity: Applying for new loans or credit cards within short intervals can hurt your credit score. Every new credit application triggers 'hard inquiries' into your credit, which not only reflects on your credit report but also impacts your credit score. In a hard inquiry, the lender pulls out the borrower's credit report to check his/her creditworthiness before taking the lending decision. 
	Hard inquiries can slash your credit score by a few points, but you can regain the scores within a few months. This can be done if you continue your timely bill payments and avoid making additional loan applications till the time your credit score comes under the required range. However, if you are checking your credit report, it will be referred to as a soft inquiry, which does not impact the credit score.
	</li>
	<li>
	Pay Full Dues: Most of us end up paying the <a href="https://www.mymoneykarma.com/buying-a-home/index.html/index.html/credit-card-minimum-payment.html" target="_blank">minimum dues</a> that credit card companies offer while generating the bills. They calculate the minimum due as 5% of the outstanding balance on the credit card in a billing cycle. You can surely escape the late payment charges by paying the minimum due amount, but interest and taxes get accumulated in the next bill.&nbsp; 
	The amount keeps accumulating and often results in massive credit card debt. It can also knock off a few points off your good credit score. So, it's advisable to pay the full credit card dues to prevent the addition of interest and taxes to your bill. Spending the entire outstanding balance before the due date will raise your credit score inevitably.
	</li>
	<li>
	Prevent Impulsive Buying: A credit card offers the convenience of hassle-free shopping, which puts us in the trap of impulsive buying. Consequently, we end up spending more, and the bills rise beyond affordability. 
	So, if impulsive buying is the reason for defaulting in the bill payments, it's better to control your spending habits. Not only does it reduce your credit score, but it also accrues late payment charges and taxes in the bill. The bill amount will increase, making it further challenging to pay on time and raising the possibility of another slump in your score.
	</li>
	<li>
	Avoid Cash Withdrawal Through Credit Card from ATMs: Don't fall into the lure of cash advance limits that banks offer on credit cards. The problem with withdrawing cash from credit cards is that the interest starts to accumulate right from the moment of withdrawal, unlike retail purchases, where a cardholder gets 20-50 days of interest-free credit. The bills rise high with a cash advance, and your credit score drops drastically.
	</li>
</ul>

<h2 class="credit_i_h2">To Wind-up</h2>

Now that you know the importance of a good credit score and have also learned the ways of improving your credit score, make sure that you maintain your financial health in good shape - and <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1335" target="_blank">check your credit score</a> regularly.

To avoid any further debacles involving your credit score, plan your budget well and spend wisely, such that you can always make bill payments on time.

<h3 class="credit_i_h3">&nbsp;</h3>

How to improve credit score fast, if it is below 600? Your loan or credit card application could get rejected! Here is mymoneykarma to guide you on how to improve your credit score.

How to Improve Credit Score Fast - Improve Credit Score

Picture this: you are making a routine check on your credit score, but the results are anything but routine! It shocks you that your credit score dropped out of nowhere, and you are unaware of what exactly happened or what to do next.
Given that you are here, I&rsquo;m guessing you are looking for an answer to a similar predicament.
Well, the <a href="https://www.mymoneykarma.com/credit-scores/reasons-for-credit-score-drop.html" target="_blank">drop in your credit score</a> could be the result of several reasons; one of them being a high credit utilization rate. If that is in fact the case, increasing your credit limit can definitely help push your credit score forward.
<h3 class="credit_i_h3">What's a Credit Limit?</h3>
The credit limit is the absolute maximum outstanding amount that your credit card issuer lets you borrow. Every time you purchase with your credit card, the purchase amount is added to your credit card balance, which cannot exceed the credit limit. Keeping your expenses well within the credit limit is vital both to avoid a debt trap and to build a good credit score.
<h3 class="credit_i_h3">Why Would You Want a High Credit Limit?</h3>
There are three primary reasons why you may want an increase in your credit limit:
To obtain more credit for making purchases - Your existing credit limit might be too low to cover a planned purchase or an expensive gift. A higher credit limit will help you to make more purchases easily, thereby allowing you to reap the benefits of <a href="https://www.mymoneykarma.com/credit-cards/credit-card-reward-points.html" target="_blank">credit card reward points</a>.
To get more credit during an emergency -&nbsp; An emergency in the form of anything - last-minute plane tickets home to car repairs - might knock on your door at any hour. Although you might want to use your emergency fund for every rainy day, a credit card can come in handy as well. The higher the credit limit, the more funds you can access to support yourself through a difficult situation.
To lower your credit utilization rate - Your credit score is profoundly affected by the amount owed (especially when it goes above 30% of the credit limit). The amount that you owe determines your '<a href="https://www.mymoneykarma.com/credit-scores/credit-utilization-ratio.html" target="_blank">credit utilization rate</a>.' Hence, an increase in your credit limit can surely boost your credit score and take care of your financial health.
<h3 class="credit_i_h3">How to Request an Increase in Credit Limit</h3>
If your lender is not willing to increase your credit limit, proceed with caution. The strategy of asking upfront can backfire and eventually become the reason behind the dip in your credit score. So, plan well before you request for a higher credit limit.
The reason why a request can hurt your credit score is that the request will lead to a hard inquiry. A number of <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">hard inquiries</a> on your credit report might make you look desperate for credit, thereby landing a blow to your credit score. With that said, sometimes it also makes sense to request a credit limit increase. Although your credit scores might dip temporarily, it will eventually improve if you have a plan in place for prompt repayment.&nbsp;
<h3 class="credit_i_h3">How to Prepare Yourself for It</h3>
Here are a few things that you should keep in mind:
Timing is key - It is always a good idea to wait until you've got a good credit track record or a stable income. As odd as it may sound, the best time to ask for more room in your credit line is when you need it the least.
Keeping your credit score stable -&nbsp; As discussed above, a request to raise your credit limit could initiate a series of hard inquiries on your credit report. So, avoid applying for many lines of credit all at the same time.
Evaluate the reasons before applying - Make sure that you are not asking for a higher credit limit on just a whim or impulse. The best reason to have is that you're trying to keep your credit usage low relative to your credit limit.&nbsp;
<h3 class="credit_i_h3">What Are the Dangers of Maxing Out on Your Credit Limit?</h3>
Your Credit Score Can Plummet - A higher credit limit <a href="https://www.mymoneykarma.com/money-management/kill-the-will-to-splurge.html" target="_blank">can tempt you to splurge</a>, resulting in a higher credit utilization rate. Maxing out on your credit card/(s) is much worse, and can totally derail your personal finance as your credit score drops considerably.
Lenders Might Not Approve of It - Maxing out on your credit limit could put you at risk of lenders considering you irresponsible. It might just start with rejection on your <a href="https://www.mymoneykarma.com/personal-loan.html" target="_blank">loan application</a>, and could extend well beyond. So, try to keep your credit card expenses well under check.
You Might Fall into a Debt-Trap - Maxing out on your credit card can put you a step closer to deep debt. Although you may plan to repay the balance soon, it could take years to repay, which often leads to a vicious cycle of interest accumulation and repayment.
<h2 class="credit_i_h2">To Sum up</h2>
If you're careful and responsible with your credit card usage, there are a series of benefits to a higher credit limit. Hence, a higher credit limit boosts your purchasing power but simultaneously increases the potential risks.
Make sure that you take all relevant factors into account before deciding whether you need a credit limit increase or not. <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-cards_2071" target="_blank">Check your credit score</a> regularly to inform your plans, as well as to assess its effects.&nbsp;
&nbsp;
&nbsp;

How to increase credit card limit on your credit card? Read this article by mymoneykarma to get insights on credit card limit increase and its effects. Increase credit limit easily.

How To Increase Credit Card Limit - Credit Card Limit Increase

Secured credit cards are quite popular and highly sought after. However, there are a few limitations to them too. In this blog, you&rsquo;ll learn how to rebuild your credit score with a secured credit card, how to convert to an unsecured credit card, and much more.
<h3 class="credit_i_h3">What is a Secured Credit Card?</h3>
It is a type of credit card designed for individuals who are looking to build credit. However, it is often used as a result of lack of access to regular (unsecured) credit cards, as they haven't yet established enough <a href="https://www.mymoneykarma.com/credit-score/i/what-is-credit-score.html" target="_blank">credit score</a>. It could be a supportive start for someone without any credit history or for someone trying to rebuild their damaged credit history. It is known as a "secured" card because it is secured by some money that you have to deposit against the card's credit limit. A secured credit card can safely hold your hand and guide you to a prosperous credit history.
<h3 class="credit_i_h3">Secured Credit Cards Vs. Regular Credit Cards</h3>
The only <a href="https://www.mymoneykarma.com/credit-cards/secured-vs-unsecured-credit-cards.html" target="_blank">difference between the two</a> is that a secured credit card is sanctioned against security (cash) deposit, which unsecured credit cards don't require. Secured cards often have higher fees than unsecured ones. You might have to pay an application fee and yearly subscription fees as well. The penalty APR could be quite high for these cards.
If you are wondering why, the answer is quite simple: a person who isn't creditworthy, is unreliable with credit. Hence lenders impose high interest rates on them. Apart from these aspects, secured credit cards are just like regular unsecured credit cards and function on similar terms.
<h3 class="credit_i_h3">How Do Secured Cards Work?</h3>
If you are looking for a chance to build or rebuild your credit, a secured credit card could be a suitable option for you. You just need to approach the bank and apply for a secured credit card. You should know that there isn't a guarantee of getting a secured card just by paying a deposit. Your documents will be scrutinized, and the application will be approved only when you meet the <a href="https://www.mymoneykarma.com/credit-cards/reasons-for-credit-card-rejection.html" target="_blank">requirements of the issuer</a>.
Once your application for a secured card is approved, you must pay the security deposit to get the card. The issuer sets a credit limit for you, which is secured with the cash deposit. After you make the initial deposit, secured cards work precisely like the unsecured ones. You can use the card wherever credit cards are accepted. As you make purchases, your credit utilization rate rises.
The <a href="https://www.mymoneykarma.com/credit-scores/credit-card-companies-report-credit-bureaus.html" target="_blank">card issuers report your monthly activities</a> to&nbsp;credit bureaus - your credit score fluctuates accordingly. You must not assume that you don't have to pay monthly credit card bills since you have already paid a deposit. The deposit is for security reasons so that lenders don't run at a loss if you ever fail to repay your dues. Just like regular credit cards, you have to repay your credit card bill every month within the due date. If not, an APR is imposed on your outstanding balance.
You can use these cards judiciously to repair your credit report. In general, you should be careful with the way you are using your secured credit cards. You should always ensure a clean record of positive activities to improve your credit health. Use the card responsibly and pay your balance on time. In this way, you can build or rebuild your credit using the card. What more? You can gain and <a href="https://www.mymoneykarma.com/credit-cards/credit-card-reward-points.html" target="_blank">redeem reward points</a> as well!
<img class="img-responsive credit_i_img" src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1570185930195.jpeg" alt="" />
<h3 class="credit_i_h3">What are the drawbacks of a Secured Credit Card?</h3>
Secured credit cards seem to be the ideal solution to all your problems. But wait, is it?
Let's take look at the disadvantages of using a secured credit card.
<ol class="homeloan_Faqs_ul_1">
<li>
There is a greater likelihood of higher interest rates.
</li>
<li>
Secured credit card fees are between $30 to $50.
</li>
<li>
It gives you a low spending limit.
</li>
<li>
The security deposit shall not be accessed until the account is closed.
</li>
</ol>
<h3 class="credit_i_h3">How can Secured Credit Cards Improve Your Credit Score?</h3>
Secured Credit Cards help improve your credit score to a large extent. Listed below are the scenarios in which your credit score could benefit from a secured card.
<ul class="banklogin_ul">
<li>
New Users: You must be aware of the fact that a credit card is the best way to build credit; a good credit history gives you access to better credit facilities. However, if you are new to the financial world, you might not have a good enough credit score to qualify for regular credit cards. A person with a low credit score is not creditworthy in the eyes of potential lenders. Secured credit cards come of use in such a scenario. It is easier to qualify for a secured card than the unsecured ones, because you are paying a security deposit to the lender - in case you fail to repay, the lenders have a fall-back option and won't incur a loss. If you make payments on time and maintain a perfect<a href="https://www.mymoneykarma.com/credit-scores/credit-utilization-ratio.html" target="_blank"> credit utilization</a> ratio, your credit scores will increase for sure. Once you have successfully earned enough credit score, upgrade to a regular credit card, and follow<a href="https://www.mymoneykarma.com/credit-cards/credit-cards-basics.html" target="_blank"> mymoneykarma&rsquo;s tips</a> to use it efficiently.
</li>
<li>
Rebuilding Credit: Your credit could take a severe blow due to many reasons - missed or delayed payments, delinquency, accounts in collections, repossession, foreclosure, etc. In such a scenario, your credit history would be spoilt, and you might have to rebuild it from scratch. A low credit score doesn't let you take new credit cards. How would you rebuild your credit then? Secured credit cards could be the perfect solution. It is easier to qualify for a secured credit card than the unsecured ones. If you get approval for a secured card, you could maintain a spotless credit history of low usage and timely payments to improve your credit score significantly. If your application is rejected,&nbsp;get help from mymoneykarma and learn. how to re-apply. Keep track of <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-cards_1345" target="_blank">your credit score </a>at mymoneykarma as well.
</li>
<li>
Improving Credit: Secured cards can come to use even though you already have good credit with endless opportunities for new unsecured cards. Let's assume that you have reached the maximum credit limit that you are entitled to, yet you wish to increase your credit limit by another Rs.2,00,000. Unsecured credit cards might not help you here as your request won't be approved, but secured ones definitely will. You could make a security deposit of Rs.2,00,000 and reap the benefits of a bigger credit limit.
</li>
</ul>
<h3 class="credit_i_h3">How Do I Convert to an Unsecured Credit Card?</h3>
If you maintain a steady and clean credit history, your secured card can be considered for an upgrade. Most issuers have their terms and conditions which you need to qualify to upgrade. If you maintain a history of timely payments and low credit balance, you are more likely to get an upgrade soon.
A few secured credit card issuers review your account after a year of usage and upgrade you to a regular card if you meet the requirements. For some cards, you might have to apply for an upgrade. Once you have reached the target credit score and successfully improved your credit history, you can apply for a new unsecured credit card with another credit card issuer.
<h2 class="credit_i_h2">To Sum Up</h2>
Secured cards might have a few drawbacks, but they could be instrumental when you are in desperate need to build your credit credentials. Just as the name suggests, these cards can serve as safe and secure channels of developing a good credit history, and thereby <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-cards_1345" target="_blank">your credit score</a>.&nbsp;
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Secured credit cards can help you to repair credit report. These are better than unsecured credit cards in many aspects, but there are some things to watch out for. Here's mymoneykarma to help.

Rebuild Credit Score with Secured Credit Cards - Repair Credit Report

When you have a significant purchase in mind and are working hard to improve your credit score, it's natural for you to wonder when the lenders report your credit activities to the credit bureaus. How long does it take the lenders to submit your records? When do the bureaus update these records? How long till your activities reflect on your credit report? This could turn out to be a vital piece of information that could help you strategize your financial moves to reach your goal. Read on to know more.
<h3 class="credit_i_h3">Credit Scores Come from Credit Reports</h3>
The very first thing to understand is that credit score comes from <a href="https://www.mymoneykarma.com/credit-score.html" target="_blank">credit reports</a>. Yes, credit reports are the only place where you can find the scores. You get the report once a year from special bureaus like Equifax, Experian, and TransUnion. Just apply to them, and you should be getting the report within a few weeks.
However, do remember that these get updated weekly and even several times daily. This is why it is essential to know how long it takes for a credit report to be updated.
<h3 class="credit_i_h3">When Do the Lenders Report to the Credit Bureaus?</h3>
This is one confusing question that bothers everyone. And most annoyingly, this question does not have an answer. There is no such rule or law that insists upon a particular date for the lenders to submit their records to the credit bureaus. However, there are patterns that one could observe to understand the trend of a lender&rsquo;s reporting habits.
Typically, the card-issuing companies report to the credit bureaus on your statement closing date. The credit bureaus can take up to a week to update this information. The three main bureaus - Equifax, Experian, and TransUnion, follow different timelines. They update your information at different times, speeds, and frequencies.
On the other hand, there isn't a hard-and-fast rule that your financial activities would be reported to the bureaus positively at the end of your billing cycle. It's mostly at the discretion of your card-issuing company. The company could report your information daily, weekly, monthly, or even quarterly. However, the popular trend is that the lenders report it at least once a month.
The credit bureaus do not insist that all lenders submit the information within a particular date every month. Each lender adheres to its schedule. Hence, your credit score is in constant flux. It can change at any moment - within days, or even within hours &mdash; as and when various lenders supply information about your credit activity.
<img class="img-responsive credit_i_img" src="../../../images/new/creditscore/when-do-credit-card-companies-report-to-credit-bureaus.jpeg" alt="When Do Credit Card Companies Report to Credit Bureaus?" />
<h3 class="credit_i_h3">How Often Are Credit Reports Updated?&nbsp;</h3>
It would be interesting for you to know that Experian, one of the most significant credit bureaus, takes care of more than 220 million credit reports. That&rsquo;s a lot, right?! Now, once the score or transaction is reported, updates to the credit report happen quite fast.
However, this update is not in real-time. This is because Experian has processes in place dedicated to making sense of the information, correcting errors, following up, etc. It is essential to know how often your credit scores and credit reports change.
Equifax, another major credit bureau, takes care of 210 million credit reports a year. When new financial information is received, the report is updated within three days. Well, now you know how long it takes for a credit report to be updated.
<h3 class="credit_i_h3">Lenders Don't Need to Report to Credit Bureaus</h3>
In case you are striving to boost your credit scores and improve your credit health before making a large purchase, you would need to ensure that a positive credit history is reported.
But here&rsquo;s the catch: All lenders do not report your activity to the credit bureaus. Even if they do, they don't need to report to all the credit bureaus. Credit reporting is entirely a voluntary practice. Credit card companies do it so that they can gauge the consumers&rsquo; creditworthiness, and they don&rsquo;t necessarily reveal which credit bureaus they report to. Therefore, it is ideal for you to keep your credit score in good standing at all times.
When the credit bureaus receive your information, they typically amend your credit report right away. They recalculate your credit score immediately. If you've been maintaining a favorable status quo, then one untimely payment won't make much difference in your credit score. However, in case you miss a payment or cause a delay for more than 30 days, you will find a considerable drop in your credit score.
<h3 class="credit_i_h3">The Solution</h3>
If you&rsquo;re concerned about how the reporting of your credit balance may affect your credit score, you should keep tabs on your spending as per your statement closing date. You should try to keep a low balance because when it comes to your credit scores, your credit utilization rate is of paramount importance.
To keep a low credit utilization rate, you must pay your balances early and in full. Most card-issuing companies typically report your credit balance to the credit bureaus at the end of your billing cycle. If you pay a part, or preferably all, of your outstanding balance before the issuing companies report your credit balance, your credit utilization rate for the concerned cards will remain low.
Since you do not know when exactly your information will be reported to the bureaus, you could consider paying off your balance more than once in a billing cycle. This will ensure that your average rate of credit utilization is continuously low.
If you notice that it's getting difficult for you to pay your credit card bills on time, you must stop making purchases with your credit cards. The new purchases made may increase your credit utilization ratio, which in turn will reduce your credit score. You could also consider increasing your credit limit. A higher credit limit automatically brings down your credit utilization rate, provided that your expenditure or credit balance remains constant.
<h2 class="credit_i_h2">To Sum Up</h2>
Since you will never really know when exactly your information is being reported or updated, it is better to play a safe game and maintain a positive credit history. Managing your credit utilization rate can be a simple way to help improve and maintain your credit.
Moreover, keeping an eye on your credit score and keenly observing the pattern in which it fluctuates could help you understand the reporting trend of your creditor.&nbsp;<a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1359" target="_blank">Use mymoneykarma's credit score tracker</a> to keep tabs on your <a href="https://www.mymoneykarma.com/" target="_blank">credit score</a>.
&nbsp;

How often do credit card companies report to credit bureaus? For effective financial planning, it is sometimes important to know how often they update your credit score. Here's mymoneykarma with help.

How Often Do Companies Report to Credit Bureaus?

Banks try their best to retain their existing cardholders and work hard to attract more. With this in mind, banks are often willing to offer a number of perks and benefits to their customers. It is always at the customer’s discretion that these privileges and liberties are put to use.

Here are a few avenues that you could explore to receive additional perks and improve your credit health.

<h3 class="credit_i_h3">Limit Your Expenses</h3>

If your credit limit is high, you will tend to spend more. Increasing your credit balance leads to an increase in your&nbsp;<a href="https://www.mymoneykarma.com/credit-cards/index.html/how-to-lower-credit-card-utilization.html" target="_blank">credit utilization rate</a>, which inevitably brings down your credit score. Also, if you spend more than you can afford to repay, you might incur a debt.

You can ask your issuer to set caps on the amount of purchases that you are allowed to make so that you can keep your credit utilization rate low, preferably below 30%. Alternatively, you could cap your expenses yourself by setting up a monthly budget.

<h3 class="credit_i_h3">Change the Due Date</h3>

Timely payment is crucial for your credit score. A late or<a href="https://www.mymoneykarma.com/credit-cards/index.html/things-to-do-if-you-miss-credit-card-payment.html" target="_blank"> missed payment</a> can have long-lasting repercussions. However, if you have multiple credit cards with different due dates, you could get confused and miss a payment unintentionally.

You could sort out this problem by speaking with the card issuers and asking them to move your monthly due dates to a single date. That being done, you will have just one date to remember and the chances are that you will not miss any payments anymore.

<h3 class="credit_i_h3">Increase Your Credit Limit</h3>

You can negotiate with the card-issuing company to decrease your credit utilization rate by <a href="https://www.mymoneykarma.com/credit-cards/index.html/increase-credit-limit.html" target="_blank">increasing your credit limit</a>. This request will lead to a hard inquiry; so you must carefully evaluate your chances of approval before applying for the raise. If your current credit limit is low, or if you <a href="https://www.mymoneykarma.com/buying-a-home/index.html/index.html/high-credit-card-balance.html" target="_blank">carry a balance</a>, you might try to request an increase in your credit limit.

The decision is entirely at the company's discretion. However, if your request is approved, you must be very careful with your expenses. A higher limit might tempt you to spend more.<img alt="6 Little-known Credit Card Tips" src="../../../images/new/creditscore/too-many-credit-cards-to-handle.jpg" class="img-responsive credit_i_img">

<h3 class="credit_i_h3">Reduce Your Interest Rate</h3>

If you have been associated with your bank or your card-issuing company for a long time, you would definitely be a valuable customer for the bank. There is no harm in politely requesting your bank for a <a href="https://www.mymoneykarma.com/credit-cards/index.html/reduce-credit-card-interest-rates.html" target="_blank">lower interest rate</a>, provided that you have maintained a clean credit history with timely payments.

If approved, a lower interest rate can help you save money if you were ever to carry a balance in future.

<h3 class="credit_i_h3">Remove Late Fees</h3>

If you've had a spic and span track record of timely payment, you can approach the card-issuing institution and ask them to waive the late fee for your <a href="https://www.mymoneykarma.com/credit-scores/index.html/how-late-payments-impact-credit-score.html" target="_blank">late payments</a>. Some cards also have an offer in which the late fee of your first missed payment is discounted.

However, this is just a backup option, and you should ensure that you make all payments on time.

<h3 class="credit_i_h3">Annual Fee Waiver</h3>

Some credit cards charge a hefty annual fee, and many customers even <a href="https://www.mymoneykarma.com/credit-cards/index.html/dos-and-donts-of-credit-card.html" target="_blank">cancel&nbsp;credit cards</a> to avoid it. In case you too are thinking on the same lines, stop and reflect! Closing an account can affect your credit age, and you wouldn't want your credit score to drop because of that.

If your issuer values you, they might be willing to waive your annual fee. You could try talking to them and ask for a waiver.

<h2 class="credit_i_h2">To Sum Up</h2>

You might find it hard to believe, but a quick phone call to your card issuer can solve a lot of potential problems and open up a door to many perks that you originally did not have access to.

However, it is best to be a responsible spender and reduce the chances of running into a problem. Also <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-cards_1316" target="_blank">keep checking your credit score </a>regularly to make sure that things are going well.

&nbsp;

Credit card usage tips by mymoneykarma. Credit card usage is a determining factor when it comes to credit health, and it is also essential that you make the most of credit card benefits.

Credit Card Usage Tips - Credit Card Tips

Credit or loans are financial instruments which are given to you by lenders with a trust that you’ll pay the bank on time. A credit score reflects how you handle your loans and credit lines responsibly. So, the answer to your question would be yes, gold loans do influence your credit score.

On the other end of the spectrum, if you neglect payments, you’ll only hurt your credit score, which can take a lot of time to repair again. If you want to get access to loans at all times, it is important to handle credit carefully. To do that, you need to know about the different ways in which a gold loan can help increase your credit score.

To help you understand this subject better, here are a few points.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Gold loan applications: Bet you didn't know that applying for gold loans impact your credit score? That’s right! Just by applying for a gold loan (and it’s not Loan for Gold, by the way), can reduce your score by a few points. But how? This happens because each time you apply for a gold loan; a hard inquiry is initiated by lenders. Hard inquiry is when lenders tell credit bureaus to assess your credit report. They determine whether your application will be approved, or not. Such hard inquiries reflect on your credit report, and therefore on your credit score. If you apply to too many gold loans in a short time, it’ll show that you are loan-hungry, or spend a lot. You won’t be getting any new loans that way. You can avoid this by <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">applying for a gold loan</a> through mymoneykarma! With a single, quick application, we find you the best Gold Loan deal from across national-level lenders.
	</li>
	<li>
	Gold loan payments: If lenders do accept your application, you will have to repay as per their terms and conditions. If you meet these, your credit score will be boosted. This is really helpful, as repayment is made very easy for gold loans, due to flexible repayment schemes and low interest rates.
	</li>
</ol>

<h3 class="credit_i_h3">How do gold loan payments affect your credit score?</h3>

It is important to make payments before or on time, if you want to make a good credit score over time. When you pay EMIs regularly on time, it tells you are responsible and credit worthy. It makes you more attractive to a borrower because they know you’ll always pay back on time. Lenders always give more preference to such customers. They can even lower the interest rates a bit for you!

<h3 class="credit_i_h3">Loan default</h3>

A default happens when you do not meet the gold loan repayment obligations according to the lender’s contract. Even if the delay is that of one day, the credit bureaus get to know about it from your lender. And that lowers your credit score substantially. In addition, you also attract charges for paying EMIs late. If you continue to pay EMIs late, you’ll get a legal notice from them, which can enable the bank to possess your gold article.&nbsp;

<h3 class="credit_i_h3">In conclusion</h3>

You know by now how a <a href="https://www.mymoneykarma.com/gold-loan.html" target="_blank">gold loan</a> can influence your credit score. Multiple applications lower the score, and making regular EMI payments boost it. Don’t miss the payment date. Set a reminder if you have to. Your credit score depends on it.

&nbsp;

Can a Gold loan impact your Credit Score positively? mymoneykarma examines the popular idea of Gold Loans as credit builder loans.

How Does A Loan Against Gold Influence Your Credit Score?

Are you a newbie, just starting out in the financial world with a clean slate and no prior credit history?
Or are you trying to rebuild what is now a troubled credit history?
Building a positive credit history is a time-consuming process. There isn't any quick solution or an easy way out. It takes patience and dedication, and <a href="https://www.mymoneykarma.com/credit-scores/factors-that-impact-credit-score.html" target="_blank">several factors</a> determine your credit score outstanding balance. The age of your credit history, your payment history, credit utilization rate, etc. are all taken into account by credit bureaus while calculating your credit score.
Each of these factors works uniquely, and it might be somewhat tricky for an amateur to understand the dynamics of credit. Read this article to discover effective ways of building your credit score.
<h2 class="credit_i_h2">Factors Affecting Credit Score</h2>
Here is a list of the factors that affect your credit score:
<h3 class="credit_i_h3">Timely Payments</h3>
Always repay the owed amount on time. Try your best to pay the amount in full. Your creditor might ask you to repay a portion of the total owed amount within the due date, but you must know that an APR will be imposed on the remaining amount. <a href="https://www.mymoneykarma.com/credit-cards/calculate-credit-card-interest-rates.html" target="_blank">Credit card interests</a> are quite high, and if you keep your payments pending, you might end up paying a lot more than you had initially borrowed. Pay on time, and your credit score is bound to rise.
<h3 class="credit_i_h3">Outstanding Debts</h3>
If you have an<a href="https://www.mymoneykarma.com/money-management/high-credit-card-balance.html" target="_blank"> outstanding balance</a>, pay it off as soon as you can. Stalling will make it a considerable burden, as outstanding amounts attract a high APR. Settling these pending balances will ensure a slow but gradual increase in your credit score.
<h3 class="credit_i_h3">Age of Credit History</h3>
This is the record of how long you have been managing credit - the longer, the better. You will be considered more worthy of getting a loan if you can prove that you have been maintaining your credits responsibly for an extended period. Hence, avoid&nbsp;<a href="https://www.mymoneykarma.com/credit-cards/dos-and-donts-of-credit-card.html" target="_blank">closing your oldest credit card</a> account; doing so could drastically bring down your credit score.
<h3 class="credit_i_h3">Credit Mix</h3>
A variety of accounts is always preferable, as it shows that you have been trusted with credit by other lenders. It presents you as a responsible borrower who has been considered creditworthy. This in turn boosts your credit score.
<img class="img-responsive credit_i_img" src="../../../images/new/creditscore/how-to-build-a-good-credit-score.jpg" alt="How to Build a Good Credit Score" />
<h3 class="credit_i_h3">Credit Card Utilization</h3>
You shouldn't exceed 30% of your available credit limit. A <a href="https://www.mymoneykarma.com/credit-cards/how-to-lower-credit-card-utilization.html" target="_blank">low credit utilization</a> rate indicates that you spend responsibly. It also suggests that you are more likely to repay the loan on time as you limit your expenses to your affordability. A low credit utilization rate assures a high credit score.
<h2 class="credit_i_h2">Building Credit</h2>
Now that you know about the various determinants of credit score, let me tell you how to improve it. You might be a beginner in need of credit score or an experienced spender with a messed up credit history. Don&rsquo;t fret. Don&rsquo;t get all worked up. There&rsquo;s a solution to every problem; you can conquer your challenges with patience and a little help. Here you go:
<h3 class="credit_i_h3">Building Credit for the First Time</h3>
Let's start with the obvious: you must have at least one credit account if you are planning on building a credit history. If it is your first credit account, here are the options you've got:
<ol class="homeloan_Faqs_ul_1">
<li>
<a href="https://www.mymoneykarma.com/credit-cards/how-secured-credit-cards-works.html" target="_blank">Secured credit card</a> - it is a credit account whose credit limit is attached to your savings account. It serves as a security measure for the bank in case you are unable to repay the balance.
</li>
<li>
Loan - You could <a href="https://www.mymoneykarma.com/credit-score/personal-loan-credit-score.html?utmsrc=personalloan_enquiry" target="_blank">take a small loan</a>. If you aren&rsquo;t eligible for it, get it cosigned by an acquaintance with a good credit score. However, the cosigner would be entering a serious obligation by doing so.
</li>
<li>
Authorized user &ndash; If an acquaintance with a good credit history is willing to add you as an authorized user on their credit card, your credit score could largely benefit from him.
</li>
</ol>
Once you establish a credit history for yourself, you would be eligible for starting your line of credit. Henceforth you need to be extremely careful so that you pay your dues on time always. If you have a credit card, you must keep your credit balance as low as possible, not exceeding 30% of the credit limit. Repay the balance in full every month. It is essential that you establish a pattern of responsible borrowing habits.&nbsp;
It might take three to six months of activity to <a href="https://www.mymoneykarma.com/credit-scores/how-to-calculate-credit-score.html" target="_blank">calculate a credit score</a>. Make small purchases every month and repay it in full within the due date. Show responsible credit habits, and it will help you build a good credit score.
<h3 class="credit_i_h3">Rebuilding a Damaged Credit Score</h3>
Damaged credit history can be hard to repair; however, it isn't impossible. The time and ways of improving a troubled credit history largely depend upon the severity of your situation. One can recover from the damage of a couple of missed or late payments in a few months, but the crisis of a substantial debt might take years to emerge from. The steps mentioned below can help you deal with both:
<ol class="homeloan_Faqs_ul_1">
<li>
Clear all debts: The very first thing that you need to do for rebuilding a damaged credit is to clear all your debts. As long as you have debt, your credit cannot be repaired. Check out what debts you already have and pay those back as soon as possible within the stipulated time.
</li>
<li>
Catch up on late payments: In case you have any late fees, pay them as soon as possible. <a href="https://www.mymoneykarma.com/credit-scores/how-late-payments-impact-credit-score.html" target="_blank">Late payments</a> are never good for your credit score.
</li>
<li>
Pay on time: This one is significant. Lenders forward your money because they expect and trust you to pay them back on time. When you are unable to do that, it reflects poorly on your credit report. As a result, lenders in the future may not want to give you any loans. Thus, you need to pay interest on time.
</li>
<li>
Reduce your expenses:&nbsp;keep a low credit balance -&nbsp;It is essential to reduce your expenses as much as possible until your debts are paid back. It makes no sense to buy expensive things when you have debts.
</li>
<li>
Reduce your credit utilization rate: The <a href="https://www.mymoneykarma.com/credit-scores/what-is-good-credit-utilization.html" target="_blank">credit utilization rate</a> is equal to how much money you owe divided by your credit limit. The lesser money you owe, the better it will reflect on your credit report. In time, you shall be able to take care of your damaged credit.
</li>
</ol>
Brace yourself - this might be a lengthy process, but it will work out for sure.
<h2 class="credit_i_h2">To Sum Up</h2>
Whether you are crawling out of debt or aiming for a fresh start in the world of finance, you must increase your credit score. Set your goals and follow through. Now that you know what you must do, you should set targets and work towards them.
It might take a lot of patience and hard work, but you should stay committed and focused. <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1329" target="_blank">Your credit score</a>&nbsp;will rise sooner or later.
&nbsp;

How to build a good credit score? Being in debt with bad credit is never a good thing. However, you can still repair a damaged credit score. Read all about it in this mymoneykarma article.

How to Build a Good Credit Score

A credit score is one of the essential components that banks and other financial institutions consider before approving any form of credit. It may be surprising for you to know that credit scores can vary when furnished from different credit bureaus, because every card issuer may not provide data to all the bureaus. The three main <a href="https://www.mymoneykarma.com/credit-scores/credit-card-companies-report-credit-bureaus.html" target="_blank">credit bureaus</a> that offer credit scores are Equifax, Experian, and TransUnion.
More Links about Credit Score:
<ul>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html">What is Credit Score</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/how-to-build-credit-history-from-scratch">How to Build Credit History from Scratch</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/guide-to-credit-score.html">The Ultimate Guide to Credit Score</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/what-is-a-good-credit-score.html">How To Improve Your Credit Score</a></li>
</ul>
A credit score is determined based on several aspects, which we are going to discuss further.
<h2 class="credit_i_h2">Factors Accountable for Credit Score Calculations</h2>
<ul class="banklogin_ul">
<li>
Types of accounts&nbsp;
</li>
<li>
Used credit vs. available credit
</li>
<li>
Payment history
</li>
<li>
Hard inquiries
</li>
<li>
Length of credit history
</li>
</ul>
Let&rsquo;s now break down these factors for a better understanding.
<h3 class="credit_i_h3">Credit Account Mix</h3>
While calculating the credit score, the credit bureaus check the type of credit accounts, such as multiple credit cards (travel, dining, shopping) or loans( education, auto, home), that you currently have. This is to determine your ability to manage multiple accounts.&nbsp; Opening new accounts may affect other aspects of <a href="https://www.mymoneykarma.com/credit-score.html" target="_blank">credit score</a> like the length of credit history, the number of credit accounts, amounts owed, etc.
<h3 class="credit_i_h3">Used Credit Vs. Available Credit</h3>
Your used credit balance vs. available limit determines the credit utilization ratio, which helps banks assess your level of responsibility towards credit usage. If your credit utilization remains below 30%, your credit score is likely to stay high. However, if all of your credit cards are maxed out, rest assured that your credit score will slump by a few hundred.
<h3 class="credit_i_h3">Payment History</h3>
Your payment history includes that of credit cards, EMIs, and delinquent accounts (if any). If you have frequently been a defaulter of payments, no lender will trust you, and it will <a href="https://www.mymoneykarma.com/credit-scores/index.html/how-late-payments-impact-credit-score.html" target="_blank">impact your credit score</a> considerably. But, if you have been a disciplined credit payer, and repay either more than the minimum due or the entire amount on time, then you have nothing to worry about.&nbsp;
<h3 class="credit_i_h3">Hard Inquiries</h3>
Hard inquiries occur when lenders check your credit score in response to a loan or credit card application. A large number of hard inquiries at once can drastically impact your credit score. However, if you are seeking a new car loan and <a href="https://www.mymoneykarma.com/personal-loan.html" target="_blank">personal loan</a> at the same time, the multiple inquiries can generally be counted as one for a given period. That period may vary depending on the credit scoring model, but typically it is from 14 to 45 days.
Note: Credit score calculations don&rsquo;t consider requests that a lender makes for a preapproved loan offer or an existing credit account. Checking your credit report also doesn&rsquo;t affect credit scores, as it comes under <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">soft inquiries</a>.
<h3 class="credit_i_h3">Length of Credit History</h3>
If you have been maintaining a positive credit history for a long time, your chances of getting a new loan or credit card become higher. The credit report is a compilation of your credit history and must contain at least one account that is active from the last six months to generate a credit score. Don&rsquo;t close your oldest credit card/account, as doing so can harm your credit score by bringing down the average credit age.
<h2 class="credit_i_h2">Tips That May Help Increase Your Credit Score</h2>
<ul class="banklogin_ul">
<li>
Pay your bills on time. Set an auto-debit system if you tend to forget the due date.
</li>
<li>
Don&rsquo;t burden yourself with too many credit accounts at a time.
</li>
<li>
Don&rsquo;t let lenders think that you are credit hungry by maxing out on your credit cards.
</li>
<li>
Monitor your co-signed or joined accounts regularly. Even if you are a responsible credit payer, your partner might miss some payments.
</li>
<li>
Try to pull your credit report from all the bureaus to identify the difference, at least once a year.
</li>
<li>
Also, tracking your credit report quarterly will ensure that it is error-free. In case you are thinking about the fee that you may need to access your credit report multiple times, here is the solution - <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_2082" target="_blank">check your credit score for FREE</a> at mymoneykarma.
</li>
</ul>
<h2 class="credit_i_h2">To Wind Up</h2>
A good credit score lies within the range of 700-900. Hence, from the very beginning, taking care of all the factors that are considered for credit score calculation will ensure that your credit remains in good shape. However, if the health of credit has already been damaged, you can either start repairing it on your own or approach mymoneykarma for assistance. We are here to help you.&nbsp;
Happy Credit!
&nbsp;

How is your credit score calculated? What factors affect it? If you aren’t particularly sure of the answers, visit the mymoneykarma website to learn about it.

Calculate Your Credit Score - How Is Credit Score Calculated? 

To make the right choice when choosing personal loans, you need to compare interest rates, fees and charges, and repayment flexibility.&nbsp;

mymoneykarma has made this easier for you by bringing all that information in one place for easy comparison.

<h3 class="credit_i_h3">Compare these Criteria of Different Major Banks</h3>

<table class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td>
			Bank
			</td>
			<td>
			Interest Rate
			</td>
			<td>
			Processing fee
			</td>
			<td>
			Foreclosure Charges
			</td>
		</tr>
		<tr>
			<td>
			<a href="https://www.mymoneykarma.com/hdfc-bank/index.html">HDFC Bank</a>
			</td>
			<td>
			10.75% onwards
			</td>
			<td>
			Till 2.5% of the total loan amount, upto a minimum of Rs. 2,999 and to a maximum of Rs. 25,000.
			</td>
			<td>
			Up to 4%
			</td>
		</tr>
		<tr>
			<td>
			Standard Chartered Bank
			</td>
			<td>
			11% onwards
			</td>
			<td>
			Up to 3%
			</td>
			<td>
			2% - 5%
			</td>
		</tr>
		<tr>
			<td>
			Kotak Mahindra Bank
			</td>
			<td>
			10.99%
			</td>
			<td>
			Up to 2.5%
			</td>
			<td>
			5%
			</td>
		</tr>
		<tr>
			<td>
			ICICI Bank
			</td>
			<td>
			11.25%
			</td>
			<td>
			Up to 2.25%
			</td>
			<td>
			5%
			</td>
		</tr>
		<tr>
			<td>
			Yes Bank
			</td>
			<td>
			10.99%
			</td>
			<td>
			Up to 2.50%
			</td>
			<td>
			4%
			</td>
		</tr>
		<tr>
			<td>
			State Bank of India
			</td>
			<td>
			10.50%
			</td>
			<td>
			1%
			</td>
			<td>
			3%
			</td>
		</tr>
	</tbody>
</table>

<h3 class="credit_i_h3">How to get Personal Loans</h3>

Getting loans from banks is not like borrowing from your parents. 
Your parents probably won’t pay much attention if you later can’t repay them back. But banks will. They also have a more stringent eligibility check.

<img alt="how to avoid rejection of personal loan : eligibility criteria" src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1587983806926.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

These checks are for determining whether you are at all capable of repaying the loan. Here are the criteria on which your getting the loan will depend. 
 
Personal Loan Eligibility

<table class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td>
			Criteria
			</td>
			<td>
			Salaried
			</td>
			<td>
			Self-employed
			</td>
		</tr>
		<tr>
			<td>
			Age
			</td>
			<td>
			21 to 60
			</td>
			<td>
			22 to 55
			</td>
		</tr>
		<tr>
			<td>
			Credit Score
			</td>
			<td>
			More than 750
			</td>
			<td>
			More than 750
			</td>
		</tr>
		<tr>
			<td>
			Net Monthly Income
			</td>
			<td>
			Rs. 15,000
			</td>
			<td>
			Rs. 25,000
			</td>
		</tr>
		<tr>
			<td>
			Minimum Loan Amount&nbsp;
			</td>
			<td>
			Rs. 50, 000
			</td>
			<td>
			Rs. 50, 000
			</td>
		</tr>
		<tr>
			<td>
			Maximum Loan Amount
			</td>
			<td>
			Rs. 25 lakhs
			</td>
			<td>
			Rs. 30 lakhs
			</td>
		</tr>
	</tbody>
</table>

 
But passing eligibility criteria is not the only determining factor. You need to submit some documents too. 
 
Documents You Need to Submit for Personal Loan

<table class="table table-bordered credit_i_table">
	<tbody>
		<tr>
			<td>
			Requirements
			</td>
			<td>
			Salaried Individuals
			</td>
			<td>
			Self-Employed
			</td>
		</tr>
		<tr>
			<td>
			ID Proof
			</td>
			<td>
			Aadhar card, Passport, Driving License or the PAN Card
			</td>
			<td>
			Aadhar card, Passport, Driving License or the PAN Card
			</td>
		</tr>
		<tr>
			<td>
			Residence Proof
			</td>
			<td>
			Utility bills or passport
			</td>
			<td>
			Utility bills or passport
			</td>
		</tr>
		<tr>
			<td>
			Income Proof
			</td>
			<td>
			Bank statement of applicant’s salary account for the previous 2 years
			</td>
			<td>
			Bank statement of applicant’s salary account for the previous 2 years
			</td>
		</tr>
	</tbody>
</table>

<h3 class="credit_i_h3">But I’m a NRI! Can’t I get a loan here in India?</h3>

Sure you can! However, you need to submit different documents. They are:&nbsp;

<ul class="banklogin_ul">
	<li>
	Copy of your Visa
	</li>
	<li>
	Copy of your passport
	</li>
	<li>
	The email ID of your HR or your own official email ID
	</li>
	<li>
	Salary slips
	</li>
	<li>
	Bank statements
	</li>
	<li>
	Proofs of residence, identity, assets and income
	</li>
	<li>
	Recently-taken passport-size photos of your guarantors and you
	</li>
	<li>
	NRE/NRO bank statements of the last 6 months
	</li>
</ul>

We hope that this information will be helpful to you. After all, its easier when everything is in the same place! Next up, we’ll be discussing the Top Benefits of Personal Loans.

&nbsp;

Personal loan eligibility is important to know before you apply for a personal loan. mymoneykarma helps you learn all about personal loan eligibility, and offers easy online application as well.

Check And Compare For Personal Loan Eligibility In 2021

In the world of credit, a <a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html" target="_blank">credit score</a> is the most important thing. Whether you are looking for a loan, a mortgage, or a credit card, lenders will check your credit score first. This is to check your degree of creditworthiness.&nbsp;
<h3 class="credit_i_h3">What is creditworthiness?&nbsp;</h3>
If your friend asks for a small loan one day, will you give it to him or her, considering you know the person to be sincere? Most likely yes, you&rsquo;ll loan such a friend the amount.&nbsp;
However, if another friend, who you know to be insincere, comes for a loan, you&rsquo;ll most likely deny that because you do not wish to risk your hard-earned money.&nbsp;
Well, that is how money lenders, both banks as well as individuals, feel. They too are opposed to giving loans to those who are less likely to pay back on time. After all, lenders do not wish their loans to turn into bad debts. That&rsquo;d be a massive loss for them.
<h2 class="credit_i_h2">A Bit About Credit Scores</h2>
In India, credit score is considered to be between 300 and 900. If you are closer to 900, the more likely you are to get the best loans with the best conditions. The further you are from 900, the poorer your credit score will be. If your score is below 570, it is considered to be in the poor credit score category.
People with <a href="https://www.mymoneykarma.com/credit-scores/side-effects-of-bad-credit.html" target="_blank">poor credit score</a> and credit history find it very hard to get credit of any kind. They also can&rsquo;t get competitive credit terms.
<h3 class="credit_i_h3">Who calculates credit scores?&nbsp;</h3>
Four <a href="https://www.mymoneykarma.com/credit-scores/how-do-credit-bureaus-get-your-information.html" target="_blank">credit bureaus</a>, namely TransUnion, Experian, Equifax, and CRIF High Mark, calculate the credit score.
<h3 class="credit_i_h3">What to do when you want to repair your credit score</h3>
When your credit score is quite low, and below average, it may currently seem that there is no way to <a href="https://www.mymoneykarma.com/credit-scores/what-is-a-good-credit-score.html" target="_blank">improve the score</a>. The good thing is that although it appears that way, it is not impossible. It is not going to be easy to adjust the score, but it shall be well worth the effort. It takes time.
<h2 class="credit_i_h2">What is Credit Repair?</h2>
Credit repair is the process through which one brings an improvement in one&rsquo;s credit score. Your credit score may have gone down for some reason. But the good news is that it does not need to stay there! You can definitely repair your credit score. It&rsquo;ll take a bit of work, but eventually, you should be able to do it.
There are two ways of getting this done.
<h3 class="credit_i_h3">The DIY Method</h3>
Let&rsquo;s say that you are traveling somewhere new. You are traveling by car and even have a map. That makes the journey easier, doesn&rsquo;t it?
Similarly, when you know the steps to improve or repair your credit score, your journey is likely to be smooth. Credit score depends on a range of criteria, such as repayment habits, loans, credit card applications, the ratio of <a href="https://www.mymoneykarma.com/loans/secured-and-unsecured-loans.html" target="_blank">secured and unsecured loans</a>, the number of hard inquiries, as well as the credit utilization ratio.
The very first thing that you need to do is <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_2074" target="_blank">get a copy of your latest credit report</a>. Read and study it. Understand what the problems are, and identify which ones are causing a <a href="https://www.mymoneykarma.com/credit-scores/6-reasons-for-credit-score-drop.html" target="_blank">fall in your credit score</a>.
From where do you get a credit report?
You&rsquo;ll be glad to know that you can get a credit report once a year, completely free of cost, from any of the credit bureaus. This means that you can get credit reports at least 4 times a year for free! Additionally, in case you need to check them more frequently, you can subscribe to the credit bureaus at a certain price to access the reports further.
Apart from credit bureaus, you can get your credit score calculated by fintech companies, such as mymoneykarma. This comprehensive service is entirely free from us. We also tell you what is affecting your score, giving you an advantageous perspective.
Common issues adversely affecting your credit score:&nbsp;
<ul class="banklogin_ul">
<li>
Reporting and administrative errors
</li>
<li>
Missed and delayed payments
</li>
<li>
High <a href="https://www.mymoneykarma.com/credit-scores/credit-utilization-ratio.html" target="_blank">credit utilization rate</a>
</li>
<li>
Too many credit accounts
</li>
</ul>
Can you really repair your credit score? You certainly can, but it will take a bit of time. Don&rsquo;t expect the credit score to jump up within a day or two. It generally takes 6 to 12 months at the very least. If you wish to repair the credit score on your own, here are a few steps you need to follow:
<ul class="banklogin_ul">
<li>
Pay attention to your credit report: Now that you know why the credit report is so important, you understand why it is important to ensure that it is error-free. What you need to do is to check it regularly. Once you do so, you can easily find the errors to rectify them. In case the errors are severe yet disputable, you can always <a href="https://www.mymoneykarma.com/credit-scores/remove-credit-report-errors.html" target="_blank">approach the concerned credit bureau</a> for rectification.
</li>
<li>
Clear all missed payments: Missed payments mar your credit score considerably. You'd want to remove this blemish as soon as possible. This you can do by clearing all current payments.
</li>
<li>
Stay away from hard inquiries: When you apply for a new credit or loan, you get what is known as a <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">hard inquiry</a>. This can be damaging to your credit score. It is a general advice not to take new loans or credit until your credit score has improved.
</li>
<li>
Gets disputes resolved: If you have any disputes on financial matters, credit report errors, missed payments, etc. get them resolved. Once done, ensure that your score does not get tarnished by these instances again.
</li>
<li>
Get a secured credit card: If you want to build your credit score, one of the most effective ways to do so is by getting a <a href="https://www.mymoneykarma.com/credit-cards/how-secured-credit-cards-works.html" target="_blank">secured credit card</a>. To get this, you have to make a security deposit. All activities on the card affect your credit score.
</li>
</ul>
<h3 class="credit_i_h3">The Professional Help Method</h3>
Sometimes, things may seem too complicated or even downright intimidating to you. At such times, it is prudent to go for professional help. Here is when you should seek out professional advice:&nbsp;
<ul class="banklogin_ul">
<li>
When you want to get the best repayment terms
</li>
<li>
When you do not have the time
</li>
<li>
When the issues or errors are too complex
</li>
</ul>
At mymoneykarma, apart from a free credit report with a comprehensive analysis, we also offer credit repair services.
<h2 class="credit_i_h2">To Conclude</h2>
Credit repair is a gradual process. If you choose an expert to do it for you, you mustn't be given an instant boost in the score. Such boosts are temporary and cosmetic at best and fabricated at worst. <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_2074" target="_blank">Check your credit score</a> regularly to stay more informed.
Make sure that you choose an expert who comes with a proven track record in credit repair. This way, you can make sure that the service is worth every penny you spend on it.
&nbsp;

A credit repair, although challenging, does not have to be impossible. You can still repair your credit score with help from mymoneykarma.

Credit Repair - How Much Does Credit Repair Cost? 

Lenders give you money after determining your credit worthiness, which means how likely you are to give back their loan on time.

Think of it from a different perspective of the lender. He is actually taking a risk by lending money to anyone at interest. After all, the borrower may not give back the money due to various reasons. This is why lenders, whether they are banks or individual lenders, give money after scrutinizing your credit worthiness. Understand, giving personal loans is risky.

They do this by seeing your credit score. A low credit score can indicate that you are not very credit-worthy, while a high score indicates otherwise. If you have a high credit score, banks will line up to give you loans.

Now, you may have heard that you can’t get loans with a bad credit score. However, it is not completely true. Here are ways to get a loan despite having a low credit score.

<ol class="homeloan_Faqs_ul_1">
	<li>
	Prove that your income can support EMI payments: Lenders are mainly interested in getting their money back on time. So if you have a stable monthly income which can support the monthly EMIs, they may not mind you having a low credit score. Yes, maybe you’ll get it at a high interest rate, but at least you’ll get the money.
	</li>
	<li>
	As for a lower amount: A lower amount mitigates the risk of the lender, even if slightly. So if banks are not ready to give you a large amount, ask for a small amount. They shall be more than likely to give you that. Giving a smaller amount makes banks more comfortable in dealing with you since smaller amounts are easier to repay.
	</li>
	<li>
	Apply along with a co-applicant or guarantor: So here’s the thing with co-applicants and guarantors. Their creditworthiness is more than yours, and if they co-apply or guarantee loan repayment, banks will be more willing to give the money. Since guarantors and co-applicants greatly increase the chances of repayment, you are more likely to get the loan. 
	<img alt="Credit bureaus handle hundreds and thousands of credit reports a year, and this there can be errors easily." src="https://mmk-s3-cms.s3.amazonaws.com/1602766553833.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">
	</li>
	<li>
	Correct mistakes in credit report: Your credit report can contain errors, and it is your responsibility to see that there are no errors. Understand, credit bureaus handle hundreds and thousands of credit reports a year, and this there can be errors easily. It is up to you to check. If you do find mistakes, report it to the credit bureau and they’ll take care of it.
	</li>
	<li>
	Ask the lender to consider your application with NA or NH in the credit report: This means that there has been an absence of credit in the last 3 years. If so, you may not have a credit score at all. In such cases, talk to your lender about this credit inactivity, and if you can get a loan. The interest rate shall be slightly higher.
	</li>
</ol>

These are measures which can help give you a personal loan despite having a poor credit score. It is important to have funds enough to repay them, otherwise your score shall go even further down.

Having a low credit score is not good for your loan prospects. Here's how you can get a loan even with a low credit score.

How Can I Get A Personal Loan With A Bad Credit Score ?

<blockquote>
<ol class="homeloan_Faqs_ul_1">
<li>
Want a new credit card - what's your credit score?
</li>
<li>
Applying for a loan - what's your credit score?
</li>
<li>
Taking a new apartment on rent - what's your credit score?
</li>
<li>
Subscribing to a new phone connection - what's your credit score?
</li>
</ol>
</blockquote>
<h3 class="credit_i_h3">Credit score - what an omnipresent word!</h3>
As you step into the world of credit, you will find the term 'credit score' on every avenue you explore. That itself must have conveyed to you how important a factor it is in the finance world. Your credit score decides whether you are eligible for a new line of credit. It tells the lenders how likely you are of paying your bills on time.
A <a href="https://www.mymoneykarma.com/credit-score.html" target="_blank">good credit score</a> is a key to good credit health. Read on to know more.
<h2 class="credit_i_h2">What is Your Credit Score?</h2>
<img class="img-responsive credit_i_img" src="../../../images/new/creditscore/what-is-credit-score.jpg" alt="What is Credit Score?" />
Your credit score is a number (ranging between 300 and 900) that tells how worthy you are of getting credit. Lenders use your credit score to evaluate whether you will repay your debts or not. A high credit score will make you an appropriate candidate in the eyes of the lenders, whereas a low credit score will be a hindrance on your path to getting credit.
A quick and amusing fact: to build your credit score, you must take credit, you must open a variety of accounts, you must be active in the credit market.
A person with no loans or credit cards will end up with a poor Credit Score.
You cannot <a href="https://www.mymoneykarma.com/credit-scores/how-to-calculate-credit-score.html" target="_blank">calculate your credit score</a> by yourself. Credit bureaus like Equifax, Experian and TransUnion evaluate your entire financial history and use a fact-based mathematical algorithm to calculate your credit score. The number of accounts you have, your credit history, your payment history, the inquiries you make, etc. - everything you do in the financial world impacts your credit score.
Why don't you try mymoneykarma's <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1355" target="_blank">Intelligent Finance Tool</a>? It gives you easy access to your credit score besides many other amazing services.
<h3 class="credit_i_h3">What Affects Your Credit Score?</h3>
While each credit bureau has its unique way of calculating your credit score, these factors are unanimously considered by all.
<ol class="homeloan_Faqs_ul_1">
<li>
Your Payment History
This is the most important credit scoring factor. A long history of timely payments is the best for your credit score. Missing a payment could be a disaster. Late payments are equally worse. However, once you start making timely payments and reduce the amount owed, the impact on your scores reduces over time.
Make payments on time for all your accounts - not just your credit card bills but your rent, utility bills and even your cell phone bill. Don't drive any of your accounts into delinquency. Don't get into debt. Clear off all existing debt. As you do so, your credit utilization rate will drop and give a boost to your credit score.
</li>
<li>
Your Credit Usage
<a href="https://www.mymoneykarma.com/credit-scores/what-is-good-credit-utilization.html" target="_blank">Credit utilization</a>&nbsp;is another important factor that you can easily alter to improve or hurt your credit health. You should keep your credit utilization ratio within 30%. It shows that you are keeping your expenses within limits by using a small amount of credit. If you notice that your expenses are exceeding 30% of your <a href="https://www.mymoneykarma.com/credit-cards/what-is-a-credit-limit-and-how-does-it-affect-your-credit-score.html" target="_blank">credit limit</a>, your credit scores will inevitably drop. The Credit Utilization ratio in each of your credit cards is taken into account by the credit bureaus to determine your credit score - individually as well as collectively.
A high rate of credit utilization indicates that you are overspending and might not be able to pay your bills on time. Maxing out your credit cards or keeping outstanding balance increases your utilization rate and brings down your credit score. Paying the balance in full each month positively impacts your credit score. If your credit utilization rate tends to shoot up, you should try to balance it by making multiple payments each month. Reduce your credit utilization rate as much as possible - preferably below 30%, which is considered healthy for your credit score.
</li>
<li>
Age of Your Credit History
Credit age is important for your credit score. It shows how long you have been managing credit. You will be considered more worthy of getting credit if you can prove that you have been maintaining your credits responsibly for a longer period. Opening new accounts could also reduce your average credit age, which may hurt your scores a bit. To sum it up, avoid closing your oldest Credit Card account and think strategically before opening new accounts. These factors can bring down your credit score.
</li>
<li>
Credit Mix
Credit Mix refers to the number of credit cards or loans or mortgages that you have. A variety of accounts is always preferable as it shows that you have been trusted with credit by other lenders. It adds points to your credit score. However, don't start randomly applying for multiple credit cards. Credit mix is a minor factor for your credit score. More importantly, credit applications always lead to a hard inquiry. Frequent hard inquiries within a short period show your desperation and bring down your credit score.
</li>
<li>
Hard Inquiry
When you apply for a new line of credit, the lenders conduct a check on your credit report. This is known as a <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">hard inquiry</a>. Hard inquiries deduct points from your credit score. If you apply for too many credit accounts, each will amount to a hard inquiry. These hard inquiries remain on your credit report for quite some time. Many hard inquiries at a time will not only reduce your credit score but will also make you seem too desperate for cash. Lenders will not be able to trust you. So whenever you apply for credit cards, spread the applications apart over a long period.
Get detailed <a href="https://www.mymoneykarma.com/credit-score.html">Credit Report Analysis</a> in less than 1 min for FREE on <a href="https://www.mymoneykarma.com/">mymoneykarma</a></li>
</ol>
&nbsp;
Quick&nbsp;Links about Credit Score:
<ul>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/what-is-credit-score.html">What is Credit Score</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/how-to-build-credit-history-from-scratch.html">How to Build Credit History from Scratch</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/guide-to-credit-score.html">The Ultimate Guide to Credit Score</a></li>
<li style="font-weight: 400;"><a href="https://www.mymoneykarma.com/credit-scores/what-is-a-good-credit-score.html">How To Improve Your Credit Score</a></li>
</ul>
<h2 class="credit_i_h2">To Sum Up</h2>
Now that you know how important credit scores are for your overall financial health, you must ensure that yours are in great shape. Keep a check on your credit report&nbsp;at all times to understand your mistakes and work upon them accordingly.
Why don't you try mymoneykarma's&nbsp;<a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-scores_1355" target="_blank">credit score tracker?</a> It not only calculates your credit score, but also guides you in managing your finances.
&nbsp;

Credit score is the most important component of your credit report. Mymoneykarma not only gives you unlimited access to your credit report, but it also has some guidelines for you to maintain a stellar credit score.

What is Credit Score? | mymoneykarma

Taking a personal loan won’t mar your credit score or credit rating by itself, but it can adversely affect the overall score. This can make it tough to get a new line of credit such as loans and credit cards. This means you need to pay back this personal loan before getting anything else for a while. 
 
If you can pay back this loan on time, more power to you! Your credit score will get a boost.

<h3 class="credit_i_h3">5 factors that affects Your Credit Score</h3>

You already know how the credit score works, right?

No?

Still a bit confused about it?

Don’t worry! We’re going to go through all that again now.

<ul class="banklogin_ul">
	<li>
	Payment history: 35%
	</li>
	<li>
	Outstanding debt: 30%
	</li>
	<li>
	Credit history: 15%
	</li>
	<li>
	Credit mix: 10%
	</li>
	<li>
	New loans: 10%
	</li>
</ul>

As you can see, new loans constitute 10% of your credit score. Taking a new loan on top of taking a personal loan can affect the score quite a bit since your outstanding debt increases.

How much this affects your score depends on your credit history.

Have you been paying off your loans on time over the years? If yes, then taking a new loan won’t affect your credit score by a significant margin.

Have a low credit score? Not sure if your score is high enough?

Don’t worry!

Here’s how to boost your credit score.

<h3 class="credit_i_h3">Boosting your credit score to get a new loan</h3>

Want a simple way to boost your credit score?

All right, here it is:

Pay back your loans on time!

Ask any expert, and they will tell you the truth. The safest and easiest way to increase your credit score over time is to pay back loans on time. Since paying back on ime shows financial responsibility, your credit score is affected positively.

<img alt="How To Improve your credit score ? | Repayment of Loan" src="https://mmk-s3-cms.s3.us-west-2.amazonaws.com/1588164716559.jpeg" style="height:640px; width:960px" class="img-responsive credit_i_img">

So, now you know pretty much all about a personal loan, except possibly its modes of payments. That’s what we’ll cover next.

<h2 class="credit_i_h2">Modes of Payment</h2>

Different lenders adopt different paying modes. Sometimes, you see this difference between banks too. Thus, it pays to know about the payment forms.&nbsp;

<ol class="homeloan_Faqs_ul_1">
	<li>
	Electronic Clearance System (ECS): This is one of the most popular repayment systems. With ECS, you can transfer funds from your account to someone else’s. And since it does not commence without your express permission, it's very safe.
	</li>
	<li>
	Post Dated Cheque (PDC): The concept of a Post Dated Cheque is that a PDC can only be used on or after a certain date, not before. That makes it ideal for paying bills and for encashing/depositing funds at the bank.
	</li>
	<li>
	National Automated Clearing House: There is a program called NACH (National Automated Clearing House) offered by the NCPI (National Payment Corporation of India). This program is offered to all banks and financial institutions and allows processing of real-time transactions. You can repay loans with the NACH.
	</li>
	<li>
	Debit mandate: This is similar to the ECS since it too requires your permission for the transferring of funds at regular intervals. On getting this permission from you, the bank starts transferring funds from your account for a loan repayment.
	</li>
</ol>

From all of us at mymoneykarma, we hope that helps you!

&nbsp;

Do Personal Loans affect your credit score? If so how can you prevent it? In what ways can you make repayments effectively? Find out at mymoneykarma.

Personal Loan Factors That Affect Credit Score In 2021

Almost everyone has had a debt at some point in time. These can be personal loans, business loans, mortgage, or its various other types. Our growing, excessive wants, coupled with overzealous credit marketers are at play here. Borrowing is not a problem. However, if one is not able to pay back loans, and if one needs an ongoing series of new loans to pay back the last one, then it is a bad debt spiral.

Because of this, it helps to separate Good debt from the bad debts, which aids in keeping your obligations under control.

Let us first look at what Good debt is.

<h2 class="credit_i_h2">What Is Good Debt?</h2>

You may be confused at this point. After all, we were told that all debt is bad.

So from where on earth does the notion of Good debt come? Can debt be good? And what is bad debt then?

Good debt is something that enables you to make more money. You can practically gain an income through it. Thus, good debt is very similar to an investment.

One more good thing about it is that it has very low rates of interest.

<h3 class="credit_i_h3">Are There Any Examples of Good Debts?</h3>

Home loans are a great example. These are cheap and easier to get in the market. Home loans also come with several tax benefits. When you buy a home, you are getting an asset. This asset can give you more money in the future through value appreciation.

Another example is an education loan. Getting a good education will pay off in the long run. Getting a loan for education is a good investment, and also a Good debt. 
Types of Good Debt

Some types of good debt are:&nbsp;

<ul class="banklogin_ul">
	<li>
	Mortgage
	</li>
	<li>
	Student loan
	</li>
	<li>
	Small business loan
	</li>
	<li>
	Credit cards
	</li>
</ul>

<h3 class="credit_i_h3">Are Good Debts All That Good?</h3>

Good debts are excellent as long as you use them well. The problem arises when there are too many good debts. What happens is that people often overextend themselves.&nbsp;

For instance, a couple may take a loan to buy a dream house that is well beyond their means. Even when they get such a loan, it leaves very little monetary maneuvering space. There may not be enough funds for meeting an emergency, as they would need to sacrifice a significant part of their income to pay back the loan.

&nbsp;

The solution? Make down payments of 20% of the property at least, while limiting borrowings to a minimum.

Now that we have learned about Good debt, it is time to learn about bad debts.

<h2 class="credit_i_h2">What are Bad Debts?</h2>

Bad debt, as the name suggests, is the opposite of Good debt. While the latter creates more money for you, the former leads you to depreciating assets. A car loan is a classic example of this.

Car’s by themselves have value depreciation. Did you know that the moment you buy a new car, its value depreciates by 20%?

Consumer loans, personal loans, and credit card loans are also examples of bad debts. When you buy anything that you otherwise can’t afford with a consumer loan is bad debt. It is not a smart financial move either.&nbsp;

Paying your credit card bills on time is excellent, but not so when you start delaying the payments. In the latter instance, it also adversely affects your credit score.

<h3 class="credit_i_h3">Don’t Use Good Debts to Pay off Bad Debts</h3>

It may seem normal to get a new loan to pay off a previously taken loan, but it is not a smart thing to do. You may get a lower interest rate when you get a remortgage, for instance, but that will not be a smart financial decision. This is because your home will still be kept as collateral, meaning it will be taken away in case you are not able to repay this loan. The second problem is that a remortgage stretches out your repayment period.

While you can surely consolidate multiple debts, doing this puts your most prized assets at risk.

<h3 class="credit_i_h3">Keep an Eye on Your Debt-to-Income Ratio</h3>

You need to keep an eye on this ratio as well, because this is one factor that directly affects your Credit Score. A good rule of thumb is to make sure that EMI payments are 35% of your take-home income.

<h2 class="credit_i_h2">To Conclude</h2>

Hardliner economists and financial experts may say that all debts are bad, but that is not true. It all comes down to the type of loan, and how you use it. There are good loans, after all.

Try to use loans only to improve your earning potential and to invest further for your future. Using these for instant gratification is not the way to go.&nbsp;

It is much more prudent to keep debts within safe limits. That way, debts won’t affect your savings.

&nbsp;

Can't tell the difference between Good debt and bad debt? Want to know about the different typess of good debt, or to get out of debt? Read this article at mymoneykarma.

Difference Between Good Debt and Bad Debt

Picture this: You had your eye on a credit card, but you find out that your credit card application was rejected. Something like this can feel like a personal blow, and can frustrate you to the core. What makes it worse is that your credit score has now taken a hit with a hard inquiry, for no apparent benefit whatsoever.
Fret not, my friend. Reassessing your approach for the next time can improve your overall credit health. With some effort, you can increase the odds of <a href="https://www.mymoneykarma.com/credit-cards/find-perfect-credit-card.html" target="_blank">getting your desired credit card</a> the second time around.
If that is the destination, where exactly do you start?&nbsp;
When failure strikes, it&rsquo;s always better to take stock of what went wrong first. Avoiding your past mistakes solves half the problem, if not most of it.
Let&rsquo;s do that now, shall we? Here are 9 possible reasons for credit card denial.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have a High Credit Card Balance</h3>
</li>
</ul>
Your credit card issuer would ideally want you to use a portion of the credit available to you. Thus, if you're going overboard on your credit limit all the time, you can count on having your credit card application rejected. Keeping your <a href="https://www.mymoneykarma.com/credit-cards/what-is-a-credit-limit-and-how-does-it-affect-your-credit-score.html" target="_blank">credit utilization rate</a> below 30% can boost your credit score and increase your chances.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">Your Existing Loan Balances Are Shooting through the Roof</h3>
</li>
</ul>
If your current debt is soaring high, it might reduce your chance of approval. It should not come as a surprise if credit card issuers are hesitant to hand you a brand new credit line while you are still under debt. Thus, the only way out is to pay down your loan balances.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">Your Income Is Too Low for Your Desired Card</h3>
</li>
</ul>
Your income can stand in the way of getting a new credit card. Though the income eligibility varies for each credit card company, your application could be rejected if you don't make enough in a month. The best way to avoid any credit card rejection would be to estimate which credit card fits the budget and your income.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have a Recent Default on Your Credit Report</h3>
</li>
</ul>
Any recent <a href="https://www.mymoneykarma.com/credit-scores/remove-negative-credit-report.html" target="_blank">delinquency or default</a> will show up on your credit report for over seven years. It invariably dents your credit score as well. These defaults serve as a sign to the credit card issuer about your financial oversights.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have Missed Payments or Made Them Late&nbsp;</h3>
</li>
</ul>
<a href="https://www.mymoneykarma.com/credit-scores/how-late-payments-impact-credit-score.html" target="_blank">Late payments</a> or missing your payments can severely damage your credit score. It is one of the worst things that can appear on your credit report. If you fail to pay for at least one credit card, it's a red signal for the new credit card company.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have Too Many Lines of Credit</h3>
</li>
</ul>
If you already have a <a href="https://www.mymoneykarma.com/credit-cards/multiple-credit-cards.html" target="_blank">huge number of credit cards</a> in hand, rest assured on having your credit card application denied. The number varies among credit card issuers, but the fact remains that having too many lines of credit makes an applicant seem credit hungry, and therefore less likely to be responsible with a card.&nbsp;
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have Limited Credit History&nbsp;</h3>
</li>
</ul>
If you are new to the credit world or have never used a credit card, you have a limited credit history. Without prior credit experience, your credit card issuer is more likely to reject your request. Thus, if you're just starting out, take a <a href="https://www.mymoneykarma.com/credit-cards/how-secured-credit-cards-works.html" target="_blank">secured credit card</a> to establish your credit history.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Have Too Many Inquiries on Your Credit Report</h3>
</li>
</ul>
Did you apply for way too many credit cards all at the same time?&nbsp;
If so, then it will hurt your credit score and your creditworthiness. Applying for too many credit cards and loans within a short period can make you look desperate for credit. Minimizing <a href="https://www.mymoneykarma.com/credit-scores/hard-inquiries-vs-soft-inquiries.html" target="_blank">your credit inquiries</a> over time and keeping long intervals between applications can help you get hold of a new credit card.
<ul class="banklogin_ul">
<li>
<h3 class="credit_i_h3">You Left Your Application Form Incomplete</h3>
</li>
</ul>
If you miss filling out vital information, like date of birth or address, you are more prone to rejection. However, most online credit card applications won't let you submit until you have filled the form. That way, you can eliminate the risk of having your credit card application rejected.
<h2 class="credit_i_h2">To Sum Up</h2>
Make sure that you <a href="https://www.mymoneykarma.com/credit-score/credit-score.html?utmsrc=credit-cards_2085" target="_blank">check&nbsp;your credit report</a> frequently to repair your credit score beforehand. The next time you apply for a credit card, take these steps and be extra cautious. Also, if you seem not to understand how to do it on your own, you can always talk to us here at mymoneykarma.
&nbsp;

Did your recent credit card application get rejected? This article by mymoneykarma gives you insights on what could be the possible reasons behind the rejection.

Reasons For Credit Card Application Denial

The relevance of the credit score and credit report isn't unknown to anyone keen to apply for loans or credit cards.&nbsp; A credit score is calculated based on several components, which are mentioned clearly in your credit report. Hence, to achieve a good credit score and to maintain it, you need to learn and understand these components. If you are wondering whom to consult for insights on your credit report, relax! mymoneykarma is here to assist you.

<h2 class="credit_i_h2">How to Understand Your Credit Report</h2>

<h3 class="credit_i_h3">Learn About the Sections That Your Credit Report Contains</h3>

Generally, your credit report is divided into these four major sections:

<ul class="banklogin_ul">
	<li>
	Information on Credit Accounts: If you have been using credit for a long time, this section will cover a significant portion of your credit report - reflecting your credit history. It will include all the information from your past accounts, such as the creditor's name, payment history, the date of opened and closed accounts, etc.
	</li>
	<li>
	Personal Details: This section includes information such as name, current address, date of birth, etc. Other information such as employment history and previous addresses can also be present in the report.
	</li>
	<li>
	Hard Inquiries: When you apply for a new line of credit, the lender pulls your credit score, and that initiates a hard inquiry. This inquiry is shown on your credit report, and it remains for seven years. Here, you need to make sure that you don’t apply for new credit within a short span of receiving the previous one; otherwise, it can affect your credit score.
	</li>
	<li>
	Collection Accounts: When you don't pay the debt for a long time, the creditors pass on your account information to the collection agencies, and this remark stays on your credit report for a longer duration.
	</li>
</ul>

<h3 class="credit_i_h3">Fathom the Components That Determine Your Credit Score</h3>

The following are the various factors that determine your credit score, as we discussed above:

<ul class="banklogin_ul">
	<li>
	Credit Utilization: You should keep your credit card limit utilization below 30% to ensure that it doesn't harm your credit score.
	</li>
	<li>
	Payment History: On-time payments can help you in building a good credit score, whereas late payments can harm it and can lead you to pay penalties.
	</li>
	<li>
	Credit History: The longer the credit history, the stronger will be your credit score.
	</li>
	<li>
	Credit Mix: A mix of credit accounts(such as loans, credit cards) when used in the right proportion can help you in gaining a good credit score.
	</li>
</ul>

Here, the crux is that taking care of all these factors will ensure that your credit report always shows a green flag to creditors.

<h2 class="credit_i_h2">In a Nutshell</h2>

A credit report, with proper understanding of it, is a crucial tool that can help you in improving your credit score. Hence, understand the nuances of your credit report and review it regularly to ensure that there are no errors or potential signs of identity theft in it, which can harm your credit health. If there are errors in your credit report, file a dispute with the credit bureaus.&nbsp;

Wondering where to <a href="https://www.mymoneykarma.com/credit-score.html">download your free credit report</a> from? Here is the answer - mymoneykarma

Happy Credit!

&nbsp;

Wondering how to understand your credit report? Read this blog on the mymoneykarma website to find the solution.

Credit Report: How to Read and Understand Your Credit Report

Rarely have you felt so apprehensive. 
 
You’re actually dreading applying for a home loan. 
 
Why? 
You do not want to apply for a home loan with an inadequate <a href="https://www.mymoneykarma.com/credit-scores/index.html/what-is-credit-score.html">credit score</a>, only to see the application being rejected and experiencing a fall in your credit score to boot! 
I mean, that’d be really unpleasant. It’d be like rubbing salt on injury. 
Fortunately, it’s mymoneykarma to the rescue!

In this article, we are going to show you several ways to <a href="https://www.mymoneykarma.com/credit-scores/index.html/how-to-improve-credit-score.html">improve your credit score</a> for home loan application.

Let’s jump right in.

<h3 class="credit_i_h3">1. Check your credit report</h3>

When you <a href="https://www.mymoneykarma.com/credit-score/home-loan-credit-score.html?utmsrc=homeloan_enquiry">apply for a home loan</a>, a lot of processes go on unbeknownst to you. For instance, just after you make the application, the bank or the lender checks out several essential criteria. These are:

<ul class="banklogin_ul">
	<li>
	A steady income
	</li>
	<li>
	How much <a href="https://www.mymoneykarma.com/buying-a-home/index.html/arrange-down-payment-for-buying-new-home.html">downpayment</a> you can make
	</li>
	<li>
	Your credit history
	</li>
</ul>

But why should you check your credit<a href="https://www.mymoneykarma.com/credit-score/credit-score.html"> </a>report? 
Because, my friend, it helps you to find out anything that is suppressing your credit score. This can be anything from an unpaid EMI to a loan default. 
Don’t worry though! Your checking of your credit report is not going to affect it adversely. This is something called a <a href="https://www.mymoneykarma.com/credit-scores/index.html/hard-inquiries-vs-soft-inquiries.html">Soft Inquiry</a> that has no effect on your credit score. 
Now, back to the point: you know by now how important it is to check your credit score before applying for a home loan. 
But where can you check it? 
You can do so from the three credit bureaus namely Experian, TransUnion and Equifax. You can <a href="https://www.mymoneykarma.com/credit-score/credit-score.html">get a free copy of your credit report</a> once a year from all three of them.

So far so good? Fantastic! Let’s move on.

<h3 class="credit_i_h3">2. Dispute inaccurate information</h3>

A big reason to check your credit report is so that you may find inaccuracies in the calculations. Sometimes, the credit bureaus make mistakes in the calculations. Credit bureaus compile or develop millions of credit reports a year. Thus, a mistake in the calculations can happen in anyone’s report. 
Now, if you do find such errors, you can and should <a href="https://www.mymoneykarma.com/credit-scores/index.html/remove-credit-report-errors.html">dispute it</a> by contacting the concerned credit bureau. A lingering error can make a big difference in your credit score, which can spell doom to your home loan application. This is why it is essential to remove inaccurate information. 
Didn’t miss that payment? Go for a dispute resolution. 
Didn’t default on your last loan? Get in touch with the credit bureau. 
Didn’t take too many loans within a short time? Holler out loud!&nbsp;

However, they won’t be making any corrections just because you tell them to. You need to show proof! So gather all the required proof before going for a dispute resolution with a credit bureau.

<h3 class="credit_i_h3">3. Pay off delinquent accounts</h3>

Maybe you already have creditors, or have taken some loans already. Doesn’t matter. But what does matter is that you pay them consistently and timely. 
Whatever you do, make sure that there are no delinquent accounts. These murder your chances of getting any loan. Delinquent accounts include bills in collection, late accounts, judgments, and charge-offs. 
This is why you need to pay them off, especially before applying for a home loan. 
But there are already delinquent accounts in my credit report! 
Take a deep breath. Take a few more. Now, what you need to do is to <a href="https://www.mymoneykarma.com/credit-scores/index.html/remove-negative-credit-report.html">get rid of this delinquent account</a> first by paying it back.

Once done, wait for 6 months. By this time, the fact that you have paid off the delinquent account shall reflect on your credit score.

That’s a good time to make a home loan application.

Now, granted that waiting 6 months to make a home loan application can be a long time, especially when the need is dire, but trust me. You won’t want to go headfirst applying for a loan when your credit score is unsatisfactory due to delinquent account records.

<h3 class="credit_i_h3">4. Reduce your debt-to-income ratio</h3>

If you have a high <a href="https://www.mymoneykarma.com/loans/debt-to-income-ratio.html">debt-to-income ratio</a>, banks are going to question your ability to pay back loans. 
The ideal debt-to-income ratio is 12%. The lower this ratio is, the easier it will be for you to get a loan. 
But what is the debt-to-income ratio? 
Let’s say that your income is Rs. 10,000. Your debt EMI per month is Rs. 4000. This means that your debt-to-income ratio is 40%. 
Now that you know that a debt-to-income ratio is, here’s something important. Make sure that the ratio is not more than 43%. 
And last but not the least:

<h3 class="credit_i_h3">5. Don’t incur any new debts</h3>

Most lenders may refuse you any loan even if your debt-to-income ratio is less than 12% of your total income. In other words, they see existing debts in a negative light. Because of this, till your mortgage is secured, you must consider not to take any new credit, including <a href="https://www.mymoneykarma.com/credit-cards/index.html/applying-for-a-credit-card.html">applying for credit cards.</a>

<img alt="SBI Card IPO - Share Quota and Subscription Status SBI plans to raise up to Rs 10,341 crore by selling 13.71 crore shares through its IPO of 'SBI Card'. Separate share quotas were set aside for six different categories of investors — anchor (3,66,69,590 shares), qualified institutional buyers (2,44,46,393 shares), non-institutional investors (1,83,34,795 shares), retail (4,27,81,188 shares), SBI shareholders (1,30,52,680 shares) and employees (18,64,669 shares). Share prices start at 755 per share (with 75 per share discount for employees), with a minimum cutoff of 19 shares to be purchased. Around 40% of the IPO was subscribed on day 1 of the offering itself, and saw a further 55% subscription on day 2." src="https://mmk-s3-cms.s3.amazonaws.com/1583229637603.gif" class="img-responsive credit_i_img">

<h2 class="credit_i_h2">HDFC Home Loan Interest Rate at 6.80%</h2>

<a href="https://www.mymoneykarma.com/hdfc-bank/home-loan.html" target="_blank">HDFC offers Home Loan</a>&nbsp;interest rate of 6.80% for loan amounts up to 30 lakhs for Women Applicants. The offer has been in effect since 11th January, 2021.

This special Housing Loan Scheme is for a limited period only, and can be availed if the loan is disbursed&nbsp;on or before 31st March, 2021. HDFC decides eligibility for the offer based on parameters such as credit scores, segments, details of other loans, etc., and is applicable only for applicants with the&nbsp;credit score&nbsp;of 730 and above.

The offer can be availed on Home Loans including Home Improvement, Home Extension, and even Refinancing/ Balance Transfer from other lenders.

However, as the offer is applicable only for loans under the ‘Adjustable Rate Home Loan Scheme’, it is subject to change at the time of disbursement. The rates are linked to HDFC's BenchMark Rate. Hence, they are variable throughout the loan period as well.

<h2 class="credit_i_h2">FAQs</h2>

What is a good credit score for home loan? 
A credit score that’s between 700 and 760 is considered to be moderate. However, that depends on the lender. With a score in this range, you can get home loans easily but a slight rate of interest.

Can I get a home loan with 700 credit score?

Yes. With a score of 700, you can get almost all home loans. As you reach 740 and beyond, you can get any of them. The terms and interest rates just get better as your credit score increases.

How can I improve my credit score to get a mortgage?

Here are a few things you can do to improve your credit score before getting a mortgage:

1) Dispute errors and inaccurate information

2) Pay off debts and delinquent accounts

3) Make timely payments to bury delinquencies

4) Bring down your debt to income ratio

5) Check your credit score regularly

6) Do not acquire&nbsp;new new debt

<h2 class="credit_i_h2">To sum up</h2>

So there you have it! Not one, not two, but 5 ways to increase <a href="https://www.mymoneykarma.com/credit-score.html">your credit score</a> (or at least to prevent it from dropping). With these strategies, it shall be easier to maintain a healthy credit score before <a href="https://www.mymoneykarma.com/home-loan.html">applying for a home loan</a>.

Want to get a home loan but your credit score is too low? Want to know how to increase your credit score for getting mortgage? Find out in this article from mymoneykarma.

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