Getting a loan is not very hard in this day and age, provided an individual has a healthy credit history. However, not everybody in need of money can avail of loans, for financial health can often have an impact on their present and future. Lending institutions offer loans based on the credit history of a potential borrower which gives an insight into the safety of their investment.
How to maintain a good credit history for Equifax score?
Sustaining a good credit history is imperative to an individual getting a loan, as no lender would risk his money by lending it to someone with a sketchy past. Here are a few pointers which could go a long way in maintaining a good credit history.
- Timely payment – Timely payment of all bills and dues is critical towards building a healthy credit report, as failure to make payments will have an adverse impact on the overall credit score. Individuals should ensure that any missed or overdue payments should be paid immediately as a lender views this with suspicion, which could result in your loan application being rejected.
- Give clear instructions – By providing clear instructions to your bank about your debt, you can ensure that there are no delays in payments, thereby, reducing human error and help build a healthy credit relationship.
- Set up payment schedule – As a borrower, you can maintain a good credit history by setting up a system wherein all instalments are paid on time. One such way is to issue post-dated cheques to the lender, highlighting his/her intention to repay the loan and clearing any ambiguity in the mind of a lender.
- Credit diversification – One smart way to build and maintain a good credit history is to diversify the debt an individual has, as debt diversification either through a secured or unsecured loan shows that you (borrower) aren’t credit hungry and willing to offer security in order to avail a loan.
- Updation – Information is perhaps the greatest tool in the arsenal of any individual or company. In this fast paced world, most of us are constantly on the move, shifting homes and jobs but often failing to update such information on our official forms. Failure to update relevant information could impact your credit history as outdated records could still show you as being a defaulter or highlight certain other discrepancies. Updating all details serves a useful purpose for both you and the lender.
- Monitoring – There could be instances where the lender is at fault when it comes to updating information. In such cases, it is important to bring any discrepancies to the notice of the concerned agency. Certain errors could reflect in a report, either in the form of wrong data or incorrect facts. It is your duty to scrutinise these details. Any delay can have a negative effect on your credit history.
Maintaining a healthy credit history is not as hard as it seems. You can ensure that you are on the right financial track by following the aforementioned steps.