Tips to Improve and Maintain a Healthy Credit Score: A Case Study of Nirmalee Chaterjee

Nirmalee Chaterjee (name changed) had always dreamed of owning her own home. However, when she decided to apply for a home loan in March, she was shocked to find out that her credit score was only around 650. This was due to a few missed credit card payments that had negatively impacted her score.

Determined to improve her credit score, Chaterjee took several steps to turn things around. She made sure to pay all her credit card bills and EMIs on time, ensuring consistent timely payment of dues. She also kept her credit card utilization low, aiming to spend less than 30% of her credit limit. Additionally, she reviewed her credit report regularly and rectified any errors she found, such as an old closed loan still marked as active.

Chaterjee’s efforts paid off, and her credit score gradually began to improve. She is now confident that she will reach the 750 mark in the next few months. However, she understands that improving a credit score is a gradual process, much like losing weight. Depending on the changes made to one’s financial behavior, it can take anywhere from one month to almost a year to see significant improvements in the score.

Experts advise borrowers to pay their dues on time, maintain a long repayment history, keep credit utilization low, and review their credit reports regularly to improve their credit scores. They also warn against making multiple credit inquiries, opting for EMI reductions or loan restructuring, and canceling credit cards without careful consideration.

By following these tips and being disciplined in financial matters, borrowers like Chaterjee can work towards achieving a healthy credit score, which can be crucial when applying for loans, especially a home loan.