How students can build strong creditworthiness: 5 Practical tips to help you get easy loans, better credit cards | Mint

To lay the basis for future financial goals, students must build a strong creditworthiness. It helps them maintain a clean credit profile and increases their repayment ability. A clean credit profile and a strong creditworthiness, anything over 750, help great when applying for loans and new credit cards, rental apartments or even obtaining reliable jobs. A good credit rating reflects responsible money management and planning. It also opens the door for better financial products, lower interest rates and higher credit limits on future loan and credit card applications. Here we discuss five practical strategies that can help students build and establish a healthy credit rating from the early years of their lives. Starting with safe credit card students usually does not have their finances in order, and most do not have fixed revenue streams. Therefore, secured credit cards are ideal instruments for students with no preceding credit experience or history. These cards are usually issued at a fixed deposit that becomes your credit limit. By making small regular purchases and cleaning the full fees each month, students can build a positive repayment history and a fundamental record. It is also important to choose a map that reports to all important credit bureaus to ensure that your credit profile and credit activity are accurately recorded and contribute to your score. Focus on timely payments Your payment history is one of the most important factors in calculating your creditworthiness. This is about 35 percent of the total creditworthiness. Therefore, it is crucial for students to pay all fees on time, including credit card accounts, home loans, EMIs for education loan, cellphone accounts and utility payments. To ensure that it becomes even more seamless, you should consider setting up auto debit mandates, using reminders or even budget instruments and applications that help avoid late payments. Remember, even a single missed payment can greatly harm your creditworthiness and take a few months to recover. Purposeful, your credit utilization utilization with a low credit utilization holds basically to how much of your available credit you use. Experts suggest that you keep this percentage below 30. This simple exercise helps to maintain a healthy credit rating. For example: If your credit card limit is £ 20,000, then try not to spend more than £ 6,000 in an billing cycle. This is important because high utilization can indicate financial tension, that is, higher dependence on credit for survival, even if you repay on time. Now students can also request a credit restriction increase after a few months of responsible use, which helps keep the use relationship low. This simple practice can also help you secure premium credit cards in the future. Make the most of the education loan education loans are tools that can do more than help you with your educational needs. It can also help you build your credit profile and increase your credit values. Most educational loans have a set moratorium period. This means that repayment of the refund begins after your course is completed. Once the repayment period begins, the on -time EMI payments contribute constructively to your financial health and credit history. Therefore, you must choose lenders who systematically report the repayment of loans to credit bureaus. Even try to repay interest during the moratorium period if financially possible. Check, follow up and correct credit reports if you are a student with a limited financial capacity and almost no activity, even in such cases you should check your credit reports regularly. Errors such as wrong personal information, names, wrong account numbers and status or unauthorized credit inquiries can negatively affect your creditworthiness. You can get one free credit report from any of the four most important credit rating agencies each year: Cibil, CRIF High Mark, Experian and Equifax. You should also always report any inaccuracies immediately to ensure that your credit profile reflects your honest creditworthiness. Bonus tip: Avoid the application for different loans at a time every time you set up an application for a new personal loan or a credit card, a hard investigation is recorded in your credit report. Now too many hard queries can significantly impede your creditworthiness and your overall credit profile within a short time. Therefore, you must be careful while applying for new loans and credit cards. Apply for it only if you have no other options left and are reasonably confident in approvals. By following these simple strategies, you can build a solid credit basis even if you are a student. This foundation will help you ensure your personal loans on reasonable conditions, lower interest rates and credit cards on fair conditions. Disclaimer: Mint has a fusion with fintechs to provide credit, you must share your information if you apply. These bonds do not affect our editorial content. This article only intends to educate and distribute awareness about credit needs such as loans, credit cards and creditworthiness. Mint does not promote or encourage credit as it has a set of risks such as high interest rates, hidden costs, etc.