Image Credit: amazon.in
Financial institutions assess the creditworthiness of a borrower for a personal loan primarily on the basis of his credit score, which reflects past credit behavior and repayment capacity.
Image Credit: amazon.in
Ensure prompt payment of existing loan EMIs and credit card bills, which indicates responsible borrowing and has a significant impact on your credit score.
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Maintain a credit utilization ratio below 30% by managing your credit limit judiciously, as a lower ratio has a positive impact and boosts your credit score.
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Avoid making repeated loan or credit card applications within a short time frame, as this behavior may indicate credit hunger and adversely affect your credit score.
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Promote a balanced mix of secured debt (e.g., home or vehicle loan) and unsecured debt (e.g., credit card or personal loan) to contribute positively to your credit score.
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Keep old credit cards and loans, as longevity on credit accounts has a positive impact on your credit score, emphasizing the importance of maintaining long-term credit relationships.
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