Credit cards act as both boon and bane. It can bury you under a lot of perennial debt and on the other hand can work wonders for your financial health by improving your credit score, which also affects your CIBIL report in a good manner.
Nowadays, most of the banks depend on CIBIL scores to sanction loans and credit cards to customers. Thus, one having a bad credit history or a no credit history is likely to be rejected for a loan from the lender.
There are many ways to improve your CIBIL score if you tend to possess one or more credit cards:
This might sound like a reasonable option if a person makes large purchases of their credit cards in the hopes of paying off the amount some time later. But, it can act negatively on your CIBIL score if any late or irregular payments are made.
It is considered to pay all the expenses using cash whenever possible to reduce the risk of a massive credit card debt. It will also help in building a good credit history if you tend to use your credit card as least as possible.
Instead of purchasing material goods with credit cards, you can use it to pay your electricity, internet, phone and water bills. It will build a positive credit history and certainly will help in gaining a good CIBIL score. This works because these utility bills are often of lesser value when compared to products bought from the market.
Even if you fail to pay off the entire amount of your credit card debt, you must aim to pay the minimum amounts on or before the scheduled due date. This will make an impression of you to the bank that you do not have the habit of defaulting on payments and can be trusted with borrowing credit.
