Reasons Your Credit Score Can Fall Despite Timely Payments of Axis Bank Credit Card

How quickly we can do flipkart axis bank credit card apply is based on our credit ratings, which are the foundation for risk-based pricing models. The importance of paying enough attention to the other significant factors or financial decisions that could affect your credit score frequently falls to the bottom of our priority list because it is generally accepted that your credit repayment history is given the most weight when calculating your credit score.

The following six financial acts could lower your credit score even if you routinely and on time pay your credit card bills and loan EMIs:

Failure to keep the credit utilisation rate at or below 30%

This percentage is calculated by deducting the total credit limit from the total balance on each of your active credit cards. Credit rating companies may also lower your credit score a few points if you go above this cap. For lenders to recognise a credit utilisation ratio of greater than 30% as an indicator of lending appetite, this is necessary.

As a result, it is suggested that you keep your Axis bank credit card usage to no more than 30% of the total permitted spending limit. Consider requesting a credit limit increase from your card issuer if you routinely go over your allotted credit. If you don’t currently have a card, you might want to consider getting one. Your overall credit limit will increase and your credit utilisation ratio will decrease if you don’t use your card more after acquiring a higher credit limit.

Numerous lenders will quickly check your credit.

When you perform the task of flipkart axis bank credit card apply, the lender will request a copy of your credit report from the credit bureaus and use it to determine how creditworthy you are. These “hard inquiries,” or requests made for your credit report by lenders, frequently result in a few points being subtracted from your credit score.

Making numerous rapid direct credit inquiries regarding the decision of flipkart axis bank credit card apply may cause your credit score to drop quickly, making it harder for you to qualify for loans and other forms of credit in the future. As a result, his credit score rapidly decreased.

Instead of making numerous credit inquiries directly to various lenders, visit online financial portals to select the best credit option and lender depending on your credit score, income, and any other pertinent information. According to the credit reporting companies, these inquiries are “soft inquiries,” and as a result, they have no impact on your credit score. A credit report is also required by some online merchants.

an increase in the proportion of unsecured loans to overall credit

The ratio of your debt that is secured to unsecured is known as your credit mix. Because lenders frequently reward customers with a higher percentage of secured loans, such as home loans, loans backed by property, and car loans, credit bureaus give these individuals better ratings on their credit reports. People with higher levels of unsecured debt—such as credit card debt backed by personal loans—should make an effort to maintain a more balanced debt-to-credit ratio in order to improve their credit score. Pay off your unsecured debt or switch to secured loans, such as a second mortgage for homeowners who already have one, a loan secured by gold, an equity loan, or another loan.

One of the obligations that come with co-signing or guaranteeing a loan is keeping track of the loan’s payments, just like with a second Axis bank credit card. Accepting joint and several responsibility for ensuring that the loan is repaid in line with the terms of the contract is a requirement of co-signing the agreement or choosing to act as a guarantor. If you made any late payments or allowed the loan to default, your credit score would suffer. Therefore, keep a careful eye on the repayment activities of your co-signed or guaranteed loan accounts to ensure that payments are made on time and to prevent your credit score from being impacted by the primary borrower’s financial error.

Erroneous credit reports

Credit bureaus use information from your credit reports, which they acquire from lenders and credit card companies, to calculate your credit score. If your lender or a credit agency makes a mistake, makes a misleading declaration, or, even worse, commits fraud, your credit score may suffer. So it’s crucial to order your credit report on a regular basis, ideally once per month. Making it simpler to find and report any discrepancies to the credit bureau and lender could aid in hastening the resolution of the problem. Every client has the right to at least one free credit report per year from each of the four credit reporting bureaus, subject to certain limitations. Online finance portals tend to offer free credit reports and ongoing updates to users which can be helpful when going for flipkart axis bank credit card apply.

Throwing away old credit cards

Credit agencies give your credit history’s age—or normal length—considerable weight when determining your credit score. Cardholders must maintain a record of their previous credit cards in order to maintain their average length of credit history. It is crucial to understand this because lenders favour applicants with a longer average credit history. If your credit history is older or has been around for more time, it will be in better form. If your credit history is older or has been around for more time, it will be in better form. When you close an older credit card, the average age of your credit history reduces, but your overall credit limit also goes down, increasing your credit usage ratio and lowering your credit score.

It makes sense to continue using your present Axis bank credit card in this situation. Try shutting the slightly newer credit cards rather than the more older ones if you must close some of your credit cards. Also factor in how much you are paying fees of the card and do a cost benefit analysis when choosing which one to close.