One of the things that all credit card holders should be concerned about is their credit (CIBIL) score. You can get a poor CIBIL score if ...
One of the things that all credit card holders should be concerned about is their credit (CIBIL) score. You can get a poor CIBIL score if you have been careful with your credit card by racking up interests, making late payments, and letting your debt rise up.
In order to maintain a strong CIBIL score, you should ideally make full payments to clear off your outstanding balance instead of just the minimum balance. If you do this, you can avoid interests as well, and also maintain a strong credit score. Furthermore, you should clear your outstanding balance well before your due date. If you exceed that, you will hurt your credit score. Finally, you should also strive to keep your credit usage to around 30% to 40% of the card limit. Using up the credit limit can reflect poorly on your CIBIL score.
However, if you already have a bad credit score, you can still work on turning that around. The following purchases will help you rebuild your credit.
Go Grocery Shopping
Grocery shopping with your credit card is a great first step. To begin with, you may end up making quite a lot of purchase on groceries on a monthly basis, and none of it would constitute an extravagance. As such, you’ll get points for regularity, you’ll start stacking up your reward points, and you won’t be wasting money on unnecessary items just for the sake of your credit. If you prefer online grocery shopping, several outlets will also offer cash back opportunities for paying with credit cards.
Paying all Utility Bills
Pay off all electricity, internet, and phone bills using your credit card. These are also regular monthly bills that don’t count as extravagances and they’ll help you better your CIBIL score.
If you have to purchase clothes, furniture, utensils, or even electronic goods, it is far more convenient to do so online and pay through your credit card. These are usually expensive goods and they will give you a great boost on your credit score if you pay back the bills on time. Furthermore, as they can be quite expensive, it might be a lot more convenient to pay for them in credit card rather than cash. You should also look out for platforms that offer great deals on making payments through credit cards. These can come in the form of discounts, cash back opportunities, etc. However, while using your credit cards for online purchases is a great option, you should avoid doing so if you are overseas as you can bring on high overseas usage fees.
Now that you know about these purchases, you can finally start the process of rebuilding your credit!