Whether it is for emergencies, medical situations, or buying an expensive product, having a healthy corpus of funds is crucial. For that, you have to manage your expenditure to ensure savings every month. Savings is also vital if you are planning on taking credit in the future.

Availing a loan or credit card is easier than ever. What’s significant is managing them. Making sure that you stay in control of your finances can help you avoid debt accumulation.

Hence, you have to be knowledgeable right from the beginning, even before you avail a personal loan or credit card.

Here are a few points that will help you manage your personal credit smartly.

Features and Benefits of the Loan or Credit Card

Increased competition has compelled financial institutions to provide additional features with their products.

You have to check and compare all features before applying for a loan or credit card. Do so, will help you to manage your credits more effectively.

Increase Your Credit Score

The CIBIL score or credit score is a 3-digit score assigned to anyone who has availed credit. The score ranges from 300 to 900 and determines creditworthiness and your ability to repay debt. You are more creditworthy if you have a high score.

Generally, financial institutions prefer customers who have a credit score of 750 or above. A high credit score also enables you to avail lower interest rates on personal loans.

You have to keep a check credit score. Also, you have to know how to increase CIBIL score if the same is low.

There are various ways how you can do the same:

Make use of your credit card

You can avail a plain vanilla credit card if your CIBIL score is low. These credit cards don’t have attractive features but are superb for increasing your score.

Or, you can take a secured credit card with all benefits and features of a premium one. Secured credit cards are sanctioned against a fixed deposit.

Using a credit card regularly is one of the ideal and fastest ways to improve your CIBIL score.

Refrain from applying for too many credits

A lender will make a credit inquiry every time you apply for a personal loan. Each inquiry will lower your score. Hence, you must refrain from making too many credit applications.

Pay your debt in time

Paying the credit card bill in time is vital if you want to increase your score. Delayed payment will invite a high rate of interest and late payment fees.

Never use too much of your credit limit

You must keep an eye on the credit limit when using the card. Utilizing 30% or less of our credit limit will improve the score.

Always pay the total amount due

Paying the minimum amount due will lower your credit score. Further, you still have to pay the full bill amount the next month even after you pay the minimum. Hence, always pay the full amount to increase your CIBIL score.

Break your purchases into monthly instalments

Paying for your purchases in EMIs rather than the total amount is an efficient way to manage your credit and savings. You can pay for almost any product on EMI online with your credit card.

Make sure to save every month

Your salary account will not provide any interest. Hence, keeping any funds in it will not generate any returns. What you can do here is to transfer at least some from your salary account to your savings account, which provides an interest of 4% p.a.

Follow these hacks mentioned above and you will be able to manage your personal loan or credit card more effectively.

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