Shubho Maha Panchami! Wishing everyone a Happy and Safe Durga Pujo. May Devi Maa Durga bless you with health, happiness, and prosperity.

Phew! The last few weeks have been a roller coaster ride for me. After posting my last video on the stock market, a lot of you have enquired about my health. I couldn’t respond to your messages personally as I am still recovering. But I am sharing a small update with you all. Around 23-24th September, I started having a cold and cough, and in the next two days, I started having a fever above 101F. The oxygen levels started falling gradually. On 28th September, it touched 77. Meanwhile, I was already under medication. Had gone for the COVID test twice but in both instances tested negative. But chest X-Ray confirmed infection and was advised Lung CT. During this period, I lost my smell and taste and was coughing. However, the Lung CT reports came clean and it seems that the partial vaccination did the magic. Now, I am only having difficulties talking due to excessive coughing! So, that’s all I had to say about myself… let’s get back to the topic!

What is a Credit Score?

What does “Credit Score” mean? A measure of credit risk (or CIBIL Score) is calculated from a credit report using a standardized formula. Factors that can damage a credit score include late payments, absence of credit references, and unfavourable credit card use. Lenders may use a credit score to determine whether to provide a loan and what rate to charge.

Your credit score is a three-digit number and can range between 300-900, 900 being the highest possible score. TransUnion CIBIL or Credit Information Bureau (India) Limited is the oldest credit bureau that prepares your credit report. The other three newer credit bureaus are Experian, CRIF High Mark and Equifax. Each of them calculates your score differently and hence may vary. Generally, your credit scores are refreshed every month.

How to improve your credit score?

• Pay your bills on time: This is the most important factor! You should always clear your bills within the due date to avoid the ‘late payment’ mark on your credit report. It is especially important that all of your recent bills have been paid on time if you intend to apply for new credit or a new loan. Recent late payments weigh against your credit score tremendously.
• Don’t close or open credit card accounts near loan time: A good rule of thumb is to not open any credit accounts near a time when you will be applying for a loan. It can lower your credit score, especially if you do not have a proven track record. If you have several credit card accounts but are only using a few of them, you’ll raise your balance-to-limit ratio if you close the unused ones.
• Pay off debt rather than moving debt to other places: The ratio of your credit card balance versus your credit limit is the key, so, closing out an account and transferring the balance someplace else simply means you increase that ratio, which is more than likely to lower your score.

Example: You owe a total of ₹ 10,000 on four credit cards, each of which has a ₹ 10,000 limit. Your total credit limit is ₹ 40,000, of which your total balance (₹ 10,000) accounts for 25 percent. If you transfer all your balances to two cards and cancel the other two, your total credit limit is reduced to ₹ 20,000, and your ₹ 10,000 balance now accounts for 50 percent of that limit. Try to keep it below 30 percent.

• Reduce your credit card balances: You should keep your credit card balance to 15 to 20 percent of your credit limit.

• Examine your billing statements for errors: Check your statement for errors. You should immediately bring it to the notice of the bank.
• Check your credit score regularly: You should review your credit reports from all four bureaus on a regular basis. If you notice any error, you must highlight it immediately. An inadvertent error can drastically reduce your credit score.

Healthy credit is important in today’s day and age. More information sharing between companies has been made easier due to new technology, so any blemishes on your credit will be known by all credit reporting agencies almost immediately. Keeping up with your credit score and taking steps to improve your credit score is essential, so take the time.