In order to know your creditworthiness, the non-banking financial institutions and banks rely largely upon credit score. A credit score is generated by a credit bureau by taking data of your various financial transactions such as the loan you are repaying. A credit score is basically a three-digit number that ranges from 300 to 900. The higher this number is the more creditworthy you are in the eyes of banks, financial institutions, and money lenders.
If your credit score is more than 800, this means you have been managing your finances quite well. You must be paying your bills on-time, repaying the loan EMI (if any) regularly and within time, must be paying the bills of your credit cards regularly and not crossing its limit, etc.
Advantages of Having a Credit Score More than 800
The benefits of having a credit score of more than 800 are as follows:
- Increased Chances of Application Approval: As mentioned above and in fact, the credit score give an idea about the creditworthiness of a person. Therefore, with other financial information related to you, the lenders will also get to know whether you will be able to pay to repay the loan or not through it. With a good credit score like 800, the lenders consider you as a reliable borrower who can repay the money. So, the chances of your loan application’s approval and credit card application’s approval increase with a high credit score.
- Interest-Free Credit Card Balance: A high credit score like 800 can offer you a credit card with zero percent promotional rates for balance transfer and purchase. Having such a credit card allows you to carry the balance of your credit card and pay it later without any extra charges.
- Get Loan at Lower Interest Rate: The credit score plays a major role in deciding the interest rate of the loan that you take. Having a credit score like 800 enables you to take a loan at the comparatively lower interest rate. This enables you to save thousands of rupees in the life span of your loan. The impact of the lower interest rate is easily visible in big loans like home loan or car loan.
- Get Credit Card with Great Offers: With a credit score as high as 800, you get a credit card with great offers like free vacations, flying miles, great dining offers, etc. This is another benefit for maintaining a good credit score by managing your finances perfectly.
Tips for Building and Maintaining a Credit Score of 800
Since you have seen the advantages of having a good credit score like 800, so you must be feeling happy and relaxed if you have that, maintaining this score is also your responsibility. However, if you do not have a good credit score and want to build that then do not worry. Here we are discussing the tips to build and maintain a high credit score like 800:
- Keep Your Credit Balance as Low as Possible: Generally, a credit balance of less than 30% of the allowed credit limit is recommended for maintaining the credit score of 800 or more. However, 30% is the upper limit keeping is as low as 10% will improve and maintain a good credit score.
- Pay Your Bills on Time: The payment history of yours plays a major role in improving your credit score and maintaining it if it is as good as 800.
- Avoid Many Credit Inquiries: Every time a financial institution or bank inquires for your credit score or credit report, it affects the score. The reason for the same is your application for loan or credit card to any non-banking financial institutions or banks. Therefore, to avoid this, it is recommended to do your homework for the lender first before applying for any credit card or loan.
- Keep an Eye on Your Credit Report and Clear the Errors As Early As Possible: The credit score that you score at any time is the result of your recent credit information. Therefore, you may lose a good credit score, if there are some errors in the report. To avoid the same it is essential to keep an eye on your credit report by checking it on the website of any of the credit bureaus of India.
Final Words: It can take you many years to score a good credit score like 800. Therefore, if you have achieved that then it is your responsibility to maintain a good way of financial management as you did you keep that score and further improve it. However, if you do not have a good score then following the above-mentioned tips can help you to build a high credit score. Since a good credit score is worth a lot as explained earlier so it is suggested to all of us to have a good score.