Use your credit card to build your CIBIL score!
Lending partners and creditors always consider your credit score before giving out any sort of credit. Be it an overdraft facility or a personal loan, your credit score needs to be in good range to get the loan approved. An individual with a low credit score will always find it hard to get a credit card, receive a personal loan, or any other secured/unsecured credit.
CIBIL is one of the most preferred credit scores in India. If your CIBIL score is not up to the mark, you can re-evaluate your financial choices and apply tips for building your score. One of the effective ways to build your credit score is by using a credit card responsibly.
Steps to build CIBIL score with a credit card
Building a good CIBIL score with a credit card is relatively easy, if you use your card responsibly. Here are some tips on how to do it:
Apply for a credit card
If you don’t have a credit card yet, apply for one. Choose a card that matches your needs and your creditworthiness. A basic credit card would suffice if you are a first-time credit card user.
Use your card regularly
Once you receive your credit card, start using it regularly for small purchases such as groceries or petrol. However, be sure to use the card only for essential purchases and don’t overspend beyond your means.
Pay your bills on time
Timely payment of your credit card bills is crucial to building a good credit score. Always pay your bills in full before the due date to avoid any interest charges or late payment fees.
Maintain a low credit utilization ratio
Your credit utilization ratio is the amount of credit you use compared to the total credit available to you. It is recommended to keep the ratio below 30% to maintain a good credit score. It is also recommended to withdraw cash from credit card after checking the interest rates and fees to avoid any surprises.
Avoid applying for too many credit cards
Applying for too many credit cards at once can negatively impact your credit score. It is advisable to stick to one or two credit cards and use them responsibly.
Check your credit report regularly
It is essential to check your credit report regularly to ensure that all your credit card transactions are accurately reported. Dispute any errors immediately to avoid any negative impact on your credit score.
In summary, responsible usage of your credit card can help build your credit score, so use it wisely and always pay your bills on time.
You can apply for the Axis Airtel Credit Card for starting your credit card journey. It is one of the best cards for beginners. The card can help you save up to 18K/year and earn various cashbacks and discounts. Excited? You can apply for the Airtel Axis Credit Card online from Airtel’s official website and/or Airtel Thanks’ Shop section.
The process is 100% digital and online with minimal documentation.