A credit score is a 3-digit number that typically ranges from 0 to 750. It gives lenders and credit facility providers valuable information about your creditworthiness. You may have a zero credit score if you have never availed of any credit facility, or if you have failed to repay what you’ve borrowed thus far.
So, how do you go about building your credit score to 750 from scratch?
It is important to have a good credit score because lenders and credit card issuers look at this number as a primary indicator of your eligibility. Furthermore, some employers and even landlords may require a credit score check as a part of their assessment procedures. So, having a good credit score can bring in a host of benefits, which is why you need to actively commit to improving your score.
The surest way to build your credit score from zero to 750 is to create a good credit history. The following underrated ways can also help you improve your credit score.
A secured credit card is issued against a deposit held with the issuing bank. The credit limit on the card depends on the amount of deposit made. You can apply for this kind of credit card if you are eligible for one, and use the credit card to make purchases and pay your bills. And as you repay your dues promptly each month, you can boost your credit score from zero.
If you do not have any deposit, you can still use a credit card to improve your credit score. This involves becoming an authorised user on another person’s credit card. The person can be your parent, spouse or any other relative with a good credit score. You can use their card and repay the dues on time to build your credit history. Just ensure that the card issuer reports your activity to the credit rating agencies.
A secured loan (like a home loan or a gold loan) allows you to borrow funds against an asset you own. You can make use of this facility to borrow funds for different purposes, and pay the dues as per the lender’s repayment schedule. Regular and consistent EMI repayments will help you build up your credit score to 750 from zero over time.
When you implement the strategies explained above and diligently repay any loans or EMIs that are due, you can improve your credit score steadily over time. And once your credit score improves, you will find it easier to avail of other credit facilities — such as instant pre-approved loans from Fi Money and the Fi-Federal Credit Card. With consolidated spend insights, you can easily track your spending and make informed financial decisions.
To build a credit score of 750 from zero, you can get a secured credit card, be added as an authorised user on your parent’s or spouse’s credit card, or obtain a secured loan. That said, you can only build your credit score from zero to 750 if you pay all your dues on time.
Yes, you can use the measures outlined above to build your credit score if you have no prior credit history, or if your credit history is limited
Credit card issuers and lenders share your repayment details with credit rating agencies every month or every quarter. So, if you adopt the strategies outlined above and consistently repay your dues, you can start to see a difference within a few months. However, it may take longer to go from a zero credit score to 750.
Yes, lenders and credit card issuers look at your previous repayment history to assess your eligibility. So, you can build a strong credit profile to avail future credit.
Simply obtaining a secured credit card or a secured loan is not going to improve your credit score. You need to diligently repay your dues and keep your credit utilisation ratio below 30% to see noticeable improvements.
