Credit Score: Although it can be difficult, it is still possible to improve your credit profile or score in India when you are unemployed. Future financial options, such as obtaining flexible personal loans and high-end credit cards, depend on having a high credit score. The report card of your financial repayment history is your credit score. This score is significant since it aids lenders in determining whether or not it makes sense to give you a loan.

Expert Advice:

According to the market experts, it is feasible to raise your score while unemployed, but it will take more deliberate effort. Although it is an issue, income is not the only one. Most important are timely repayments. Maintaining your credit score can be achieved by regularly making on-time payments with your savings, benefits, or any other source of income.

Utilizing credit is equally crucial. Maintaining your credit card balances below 30% of your entire limit demonstrates responsible use and can raise your credit score. Steer clear of taking on new credit card debt or loans as this can indicate risk to lenders and raise the pressure to repay. A loan against mutual funds (LAMF) is a wiser choice if you require liquidity because it allows you to access money without interfering with your long-term investments.

4 Tips to Improve Credit Score:

1. Examine and make corrections to your credit report.

First, request your credit report from reputable bureaus like CIBIL, Experian, and CRIF High Mark. Review it carefully for errors and inconsistencies, such as incorrect account details or inaccurate personal information. Dispute any issues you find and take steps to resolve them, doing so can boost your score.

2. On Time Payments
Maintaining a clean payment history plays a crucial role in boosting your credit score. Therefore, make at least the minimum payments on all your current debts, such as credit card bills and personal loan EMIs, even during financial hardships caused by unemployment. By consistently paying on time, you demonstrate responsibility and financial integrity to lenders.

3. Credit Utilisation:
To strengthen your credit score, prioritize keeping your credit utilization ratio, the portion of your credit limit you use, below 30%. Since lenders often view high credit usage as a sign of financial stress, avoid maxing out your credit cards. Instead, aim to reduce your outstanding balances whenever possible.

Also Read: Missed a Payment? See How Much Your Credit Score Drops

4. New Credit Applications:
Each time you apply for new credit, whether it’s a credit card or a personal loan, you trigger a hard inquiry on your credit report, which can lower your credit score. Therefore, while you’re unemployed, avoid applying for new credit lines unless it’s necessary. Limiting these applications helps protect your score during financially sensitive periods.

Disclaimer: This content aims to raise awareness about credit options such as loans and credit cards. However, we do not encourage taking credit due to potential risks. Always seek advice from certified professionals before proceeding.

Also Read: Top 6 Credit Cards With Best Shopping Offers: Check the List

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