Credit Score: Tips on How to Improve Your Credit Score?

Credit Score: Why it Matters and How to Improve It?

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Credit Score
Your credit score is a simple number that tells a complicated story. An enormous piece of your financial history — from long term debt to a couple of missed payments— can be summed up by this number. This little figure can significantly affect your life, as it is one of the primary criteria that is considered by banks and finance companies before sanctioning a loan.

Let’s Keep It Simple:

There are five factors that determine how your score is calculated:

  1. Payment History: This is, without any doubt, the most significant factor. It contributes greatly to your credit score and is a factor that various banks use to determine whether you’re going to default on future credit.
  2. Amount Owned: This is the second most significant factor that goes into your credit score. In case you’re continually “maxing out” your credit cards and “reusing” your accessible credit each month, it demonstrates that you’re struggling to make ends meet. Keep your general credit usage below 30% of the sanctioned limit.
  3. Length of Credit: When did you first borrow and how old your credit history plays a role in your credit score.
  4. New Credit: When did you most recently borrow? Have you borrowed a lot recently? These factors also impact your credit score. If you have a lot of “inquiries” in your Credit report, it perhaps means that you are a “credit seeker” or someone who is anxious to get credit facilities.
  5. Kinds of Credit: The types of loans that you have availed tells the bank something about your credit behavior. Secured loans like home loans or automobile loans are considered “good credit”. Unsecured loans like personal loans and gold loans indicate a credit-seeking behavior.

Know the Secret of Improving Credit Score

Improving your credit score requires significant effort. If you want to improve your score so you can get the best home loan straight away, you should hold off on that huge purchase. The way to improving your credit score is to be even more monetarily dependable.

When you pay your base installment (or even somewhat higher), did you find that you were utilizing your accessible credit again the next month? It’s a horrible and ceaseless cycle except if you roll out uncommon improvements to stop it.

If you have a low Credit rating, there are a few things you can do to begin improving your credit score today:

  1. Check for mistakes on your file: If there are any accounts that don’t look familiar to you, investigate these immediately and ask the bureau to rectify them.
  2. Clear your outstanding debt: Hold off on your impulse to purchase the latest smart TV or mobile phone. Conserve your resources and try to pay off your existing debt. Reducing your utilization of existing limits will help in improving the score.

What to do if you have no credit bureau record?

Improving your credit score is useful; however, where do you start if you genuinely have no credit bureau record? Will you have the option to get home loans if you have practically no record of loan repayment?

Don’t lose heart. Even if you are a first-time borrower, there are many finance companies like Home First that are still keen to provide you with a loan. However, you should be able to demonstrate the following to your prospective lenders. A) You have a steady source of income. B) You do not have any loans for which you are making monthly payments. C) You have sufficient income to afford the installments for the loan that you have applied for.

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Your home loan will be processed in 2 steps:

  1. You receive the approval of your home loan.
  2. You sign the loan agreement papers and complete other necessary documentation. The loan amount is thereafter paid directly to the builder by Home First Finance Company.

Loan decisions are made in less than a week. You will receive an SMS on your registered mobile number as soon as we make a decision.

HomeFirst does not charge any prepayment fees. This applies to both partial and full repayments. In fact, we have a special Auto-Prepay feature to facilitate this process for you.

HomeFirst offers loan tenures between 1 year to 25 years. If you opt for a longer tenure, you can get the advantage of a lower EMI each month.

HomeFirst can provide finance up to 90% of the property value. The balance has to be arranged by you from other sources. Please note: 90% financing is only available for loans amounting to less than Rs. 30 lakhs.

All co-owners of the property have to be co-applicants to the loan. A person who is not a co-owner can also become a co-applicant to the loan.

During the construction phase, HomeFirst will disburse funds to the builder on your behalf. These will be based on payment requests made by the builder as per the construction schedule.

HomeFirst will charge interest only on the amount disbursed as loan during the construction phase. In this period, interest is charged only on the disbursed loan amount. For example, if you have a sanctioned loan of Rs 10 lakhs, but the property is under construction and we have disbursed only Rs 4 lakhs, you will be charged interest only on 4 lakhs. These interest payments are referred to as pre-EMI interest payments.

EMI payments will start only after completion of the project and registration of the property.

All cheques to HomeFirst should be written out in favor of ‘Home First Finance Company India Limited’.

In the event of an unfortunate incident, home loan insurance will help you or your family pay off the home loan. This ensures that the burden does not suddenly fall upon family members at a bad time.

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