7 free and low cost ways to protect your credit

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CIBIL score is the most commonly used credit score in India, because CIBIL or Credit Information Bureau Limited is the organization which keeps  a track record  of the financial habits of individuals in the country. CIBIL score is one of the most important factors which banks and financial institutions consider while analyzing your loan application. A CIBIL score is generated based on the credit history which includes the credit you have taken in the past and the manner in which you have repaid it. A score more than 750 qualifies to be called high score and it means that you are very credit worthy. On the other hand a poor score is less than 350 and proves that you are a risky customer for any bank or financial institution. If your CIBIL score is less than 350 then banks and lending organizations will hesitate in approving your loan or credit card.


Awareness about a good credit score is increasing in the country because most people need to take loans for various purposes. Often people get surprised when their loans are rejected and wonder how to protect and improve their credit score. However, if your credit score is damaged then it may take some time and effort to improve it, and hence prevention is better than cure in this case. Let us look at some ways in which you can protect and improve your credit score.

Pay bills regularly

Regularity of bill payments comprises 35% of a person’s total credit score. Many people are still not aware that paying their bills like electricity bill and phone bills play a major role in improving your credit score. Hence it is important to pay your utility bills on time. If you want a really healthy credit score then you should make no late payments for seven years at least.

Square off debts

Another easy method to improve your credit score is to start paying off your old debts and loans. It is also advisable to make timely payments of the loan EMIs to get rid of your dues, even if the loan amount is a small one. It always helps to minimize your outstanding debts when it comes to improving your CIBIL score.

Less number of credit cards

If you have a credit card, it makes you eligible for loans and you can also take a loan against your credit card. However, owning too many credit cards and making large purchases on credit card can cost you high at times. It is hence advisable to avoid having credit cards more than necessary and avoiding the use of credit cards in the first place. You should also try to limit the total expense on your credit cards between 10-20% of the total credit limit.

No card defaults and new purchases

One important method of improving your credit score is to pay off all your credit card debts and avoiding defaults. It is ideal to maintain the balance of your credit card at least 30% below the credit limit. You should also pay off all dues when the outstanding balance is nearing the credit limit. Also,“credit card apply” is a bad idea because this can further damage your score

Get a secured credit card

If you have a low credit score then it is a good idea to get a secured credit card and build a brand new credit history with its help. If you make payments on time for the secured credit card, it will improve your credit score.

Timely EMI payment

Pending loans and debts have a major impact on your credit scores and the EMIs on these loans and debts should be paid on time. At the same time, if you keep your EMIs pending it will compound your interest.


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