• Basis

5 ways to build your credit score 🎰

Your credit score often influences your life in more ways than we give it “credit” for. 😛 This adult report card helps lenders determine whether you’re a trustworthy borrower or not, what interest rates you’ll be given, and even the amount you can get on a loan.

Not everyone has a credit score — we all have to start from scratch and work towards it. Here are some handy tips from us, to help you achieve that A+ score:

1️⃣ Always pay on time - Whenever you’ve taken on any form of a loan — be it a housing loan, a credit card, or even an EMI plan for a new iPhone; make sure you always make your periodic payments on time. Consistent on-time payment is the #1 factor when it comes to building your score. 🧗🏽‍♀️

2️⃣ Only use ~30% of your credit limit - Credit utilisation is an important factor in your score calculation too. If you’re using a card that has a credit limit, make sure you use around 30% of the limit or less. ✅ For example, if you have an INR 1,00,000 limit, try using only ₹ 30,000 of that limit in one billing cycle to see the best results on your overall score.

3️⃣ Use your card - This is simple but important! Credit scores are best built when you use your credit limit and pay the bills on-time, all the time. Remember, you don’t have to pay interest if you make timely payments on the full amount! So don’t shy away from using that card at least once a month for your online spends, grocery shopping, travel expenses, etc. 🛍️

4️⃣ Don’t apply for too many cards at the same time - Cards and their rewards are tempting and they’re a great way to make payments. However, make sure you don’t apply for too many cards at one go. 🙅🏽‍♀️ This might give off the wrong signal as it may seem like you’re in a money crunch, which could negatively affect your score.

5️⃣ Get your own card - Finally, in order to build your credit, you need to have your own card. If you have an add-on card (the card where a family member might be the primary holder and you’re the secondary holder), it doesn’t help build your score. Apply for your own card, and get started on your own credit journey! 💁🏽‍♀️

Building your credit score might take some time, especially if you’re just starting out. But if you follow these handy tips and stick to them, reaching that A+ should be a walk in the park. 😃

Questions? Give us a shout-out on the Basis community!