You were all set to achieve your financial goals. Your credit score was in good shape, and you felt confident about your plans. Then the pandemic hit, and everything changed. Suddenly, uncertainty took over. Your income may have been affected, expenses increased, and you might have dipped into your savings more than expected. If you are like many others, you may have wondered how to maintain your financial health during such turbulent times.
Maintaining a good credit score may seem challenging, but with the right approach, it is achievable. This blog explores five practical ways to help you maintain your credit score in this 'new normal’.
One of the simplest yet most crucial ways to protect your credit score is by paying your EMIs on time. Whether it is a home loan, car loan, or personal loan, timely payments help maintain your creditworthiness. Always track your due dates and ensure sufficient funds in your bank account to avoid late fees and additional interest. While a short delay of a few days may not be reported immediately, missing a payment by 30 days or more can significantly harm your credit score.
If you are an HDFC Bank customer, you can easily schedule auto-debits from your savings or salary account through NetBanking in just a few minutes.
Deferred payments can help protect your credit score during periods of financial stress by allowing you to postpone payments without being marked as delinquent. When lenders offer a deferral, they generally agree not to report missed payments to credit bureaus, preventing an immediate negative impact on your credit score. However, it is important to manage your other debts responsibly and be prepared to resume payments once the deferral period ends, as future missed payments can still affect your score.
It is also essential to note that accrued interest during the deferral period may extend your loan tenure by up to a year or increase your EMI amount proportionately once repayments resume.
Credit card bills are often given the lowest priority during a financial crisis. However, paying at least the minimum amount due on unsecured debt is critical to maintaining a healthy credit score. If you are struggling, contact your credit card issuer to check whether your payments can be restructured so that the amount goes towards reducing the principal balance, after accounting for fees and interest.
Regularly checking your credit score allows you to identify errors or discrepancies early, which can then be corrected to prevent negative impacts. Monitoring your score also helps you stay informed about changes resulting from recent payments or new debt, enabling you to adjust your financial behaviour accordingly. Staying aware of your credit status allows you to take timely action, such as paying dues on time or reducing outstanding debt.
Your credit report includes a list of risk factors that lenders consider when assessing your creditworthiness. It outlines the five key factors you should focus on to improve and maintain your credit score over the long term. These factors are:
Maintaining a healthy credit score requires consistency, awareness, and disciplined financial habits. By paying instalments on time, managing deferred payments carefully, prioritising credit card dues, and regularly monitoring your credit report, you can protect your credit profile even during uncertain times. Understanding key risk factors further empowers you to make informed decisions and stay on track towards long-term financial stability.
With HDFC Bank, building and maintaining a strong credit score is simple. You can take advantage of flexible EMI repayment options, making managing your finances easier and boosting your credit over time. Apply for a Credit card online and enjoy benefits like cashback offers and exclusive deals.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
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