How to improve your credit score without a credit cardÂ
How to Improve your Credit Score:– Are you also wondering whether it is possible to increase credit score without credit card, I would say yes! But how is this possible! Let me tell you some tips by which you can increase your credit score without any credit card. But for this some conditions are applicable which it is very important for you to adopt, without which it is not possible! Before starting the post, we will try to know some things, then we will tell you in detail #How to improve your credit score without a credit card.
What is Mean of Credit Score
If seen, the credit score reflects the history of your transactions. The number of times you do transactions in a year, its record gets recorded in the bank account. For example, how much did you transact with the market this year? Keeping an eye on the transactions, a whole year’s credit score is made! By which your credit score is measured. Your credit score is formed on the basis of this.
Benefits of credit score
Although it has many benefits, but here we will talk about some of the main benefits! Suppose if you want to buy a house then first of all your credit score is checked. Although it has many benefits, but here we will talk about some of the main benefits! Suppose if you want to buy a house then first of all your credit score is checked.
This process is done by the bank. Suppose if your salary is 60 to 70 thousand per month and you have taken a loan on EMI and you are paying it at the right time, then it increases your chances of increasing your credit score.Keeping this in mind, the bank provides loan to you. Not only this, If you take any loan in future, first of all your CIBIL score is checked! Seeing this, your loan gets passed. If the score is good, you are also given a higher credit card limit.
What are the types of credit score?Â
Credit scores can be of many types but the most commonly used credit scores are:-
- FICO Score
- Vantage Score
- Trans Union Credit Score
- Equifax Credit Score
- Experian Credit Report Score.
1.FICO Score:- A FICO score is a type of credit score that is considered to be between 300-850 and can be widely used by lenders to determine the creditworthiness of a borrower. It is based on the credit history of an individual and also represents their likelihood of repaying the loan on time.
Factors such as your payment history, loan amount, length of credit history, type of credit used and recent credit inquiries are taken into consideration. A high FICO score also generally indicates a low risk to the lender, while a low score may suggest a high risk.
2.Vantage Score:- Vantage Score is also a type of credit score which ranges from 300-850 similar to FICO score. It is created by the three major credit bureaus: Experian, Equifax and TransUnion, to provide a consistent and competitive scoring model. It also uses a different calculation method than the FICO score and considers factors such as payment history, balances, available credit, and recent credit activity. The Vantage Score is also used by some lenders to assess creditworthiness and make lending decisions.
3.Trans Union Credit Score:- A Trans Union credit score is a type of credit score provided by the credit bureau Trans Union. It ranges from 300 to 850, similar to a FICO score or Vantage Score. The Trans Union Score is based on an individual’s credit history, taking into account factors such as payment history, debt level, length of credit history and types of credit used. The Trans Union credit score can be used by lenders to evaluate creditworthiness and determine the likelihood of loan repayment. A higher Trans Union credit score also generally indicates a lower risk to the lender.
4. Equifax Credit Score:- Equifax credit score is also a type of credit score provided by the credit bureau Equifax. This is similar to a FICO Score, Vantage Score, or Trans Union Credit Score in the range of 300-850. As mentioned earlier, the score is based on an individual’s credit history and considers factors such as payment history, debt level, length of credit history and type of credit used. It is primarily used by lenders to evaluate creditworthiness and make lending decisions. A high Equifax credit score generally indicates a low risk to the lender.
5. Experian Credit Report Score:- An Experian credit report score is a type of credit score provided by Experian, your credit bureau. It ranges from 300-850, similar to other credit scores like the FICO Score, Vantage Score, Trans Union Credit Score, and Equifax Credit Score. This score is based on an individual’s credit history and takes into account factors such as payment history, debt level, length of credit history and types of credit used. Experian Credit Report Score Credit report scores are used by lenders to evaluate creditworthiness and determine loan repayment likelihood. A high Experiential credit report score usually indicates a low risk to the lende.
Here Are 5 Tips On How To Improve Your Credit Score Without Knowing Credit Cards!
- Pay your bills on time:– Late credit card payments can have a significant impact on your credit score. Paying your bills early increases your chances of increasing your credit score.
- Try to keep your Balances low: High balances on your loan and other debts can lower your credit score. Try to keep your balance as low as possible, especially on credit card accounts.
- Do not apply for new credit frequently: Every time you apply for new credit, it generates a hard inquiry on your credit report, which can also lower your score. Make an effort to limit the number of new credit applications.
- Fix Mistakes in Your Credit Report: Every time you keep checking your credit report! Sometimes we miss paying our EMIs due to which our credit score comes in handy! If possible, try to correct the mistakes in your credit report every time.
- Become an authorized user: Consider becoming an authorized user of someone else’s credit card account with a good payment history. This can help improve your credit score over time.
Here are some common mistakes That can lower your credit score. Please don’t Make these mistakes.
- Making your payments late: If you make late payments, your credit score may drop. Missing payments on time can have a significant negative impact on your credit score. Make sure to pay ahead of time.
- Maximizing Credit Cards: Assuming you have a credit card, high credit card balance and maximum credit cards can lower your score by increasing your credit utilization ratio. Remember to use as little as possible.
- Closing Your Credit Card Accounts: Closing a credit card account can lower your credit score by reducing your available credit and shortening your credit history.
- Applying for new credit frequently: Multiple credit applications in a short span of time can generate hard inquiries on your credit report and lower your credit score. Avoid credit cards as much as possible! Apply it only when needed! Don’t take unnecessary credit card burden on your head
- Not Checking Your Credit Report Regularly: By not checking your credit report regularly, you may not be able to spot the errors or inaccuracies that keep your credit score falling if you have checked it properly every month. If you do, your mistakes will be detected, if not, it can affect your credit score. If possible, check it once a month.
- Keeping a high balance: If possible, take a loan from the bank that you can repay! Borrowing more than your income and not repaying it on time can hurt your credit score.
- Do not borrow money on credit card:- Sometimes we unknowingly take money from ATM with credit card, never make this mistake! You get more interest on credit card, on top of that if you do not pay it on time, then you get double interest and your credit score also works.
