Your Credit Score Could Save You Money: How To Build A Powerful Score And Unlock Better Interest Rates- Explained

How To Build And Maintain A Good Credit Score

Do you think your credit score is just some boring figure? Well, let me tell you that it is actually your great opportunity to enjoy lower interest rates, best loan offers, and even a quicker way to reach financial independence. A high credit score practically shouts to the banks, “I’m responsible, trustworthy, and low-risk, give me the benefits!”

Now picture this scenario: two people come into a bank. One has a dream credit score, and the other one… not so much.

Who will get the lower interest rate? You guessed right! That’s why improving your credit score is not only smart, it’s also a smart move.

The higher your score, the more you get to borrow money at lower rates, the more you save on your monthly payments, and even the faster you can get rid of the debt. Therefore, whether it’s a housing loan, automobile loan, or credit card, your credit score is the silent hero who is always there helping you keep your finances smooth and anxiety-free.

So Here Are 7 Smart Ways To Boost Your Credit Score

• Pay on Time, Every Time: Late payments are the biggest credit score killers. Always pay EMIs, credit card bills, and other dues on or before the due date. Punctuality pays off!

• Keep Your Credit Utilisation Ratio Low: Aim to use 30% or less of your available credit. High usage signals risk to lenders. Pay down debts before month-end if needed.

• Maintain a Healthy Credit Mix: Balance secured loans (home, vehicle) with unsecured credit (personal loans, credit cards) to show lenders you can manage different types of credit responsibly.

• Apply for Credit Sparingly: Each loan or credit card application triggers a hard inquiry. Apply one product at a time and wait for the final decision.

• Let Credit Age Gracefully: Older accounts improve credit history length. Keep old credit cards active occasionally instead of closing them.

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• Monitor Your Credit Regularly: Check your credit report for errors or discrepancies. Correct mistakes to prevent unnecessary score drops.

• Take Advantage of RBI’s New Directions: Improved credit scores let you request lower interest rates on floating-rate loans, reducing EMIs, shortening loan tenure, and saving money.

Make The Most Of RBI’s New Regulations, Here Is How-

If there were a ranking of rules, the 7th would be the one with the most fun, and the reason is this! Here’s the good news, the RBI just gave a very favourable bypass to borrowers. In case you have had a better credit score, you can now reduce the waiting period for banks to change your loan spread from three years to none under the new 2025 regulations (from 1st October). You are allowed to ask your bank now to do a new assessment of your credit earlier, and yes, this will lead to a lower interest rate, smaller EMIs, and a shorter loan tenure.

Hence, if you have been punctual in your payments, your CUR has always been low, and you have been acting like a financial superhero, do not hesitate to pick up the phone and call your bank with the words, “Hi, I am worth a better rate!” Your bank account will be grateful!

(With Inputs)

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