How to Build Your Credit Score from Scratch

Are you new to credit? 

Building a credit  score takes time and effort but is an important part of your financial journey. If you have never availed any form of credit or loan and have no credit history, here’s how you can build your credit score from scratch.

Importance Of Credit Scores 

importance of credit scores

Having a high credit score or being creditworthy is extremely important. Some of the most important reasons for you to build your credit score are as follows:

  • Your credit score is the single most important factor that lenders consider before disbursing loans to you, be it home loans, consumer durable loans, personal loans, etc.
  • Banks will also consider your credit history before providing new financial products such as credit cards

Apart from the above, you can also enjoy loans at lower interest rates as well as quicker approvals if you have a high credit score.

How to Build your Credit Score from Scratch

Building your credit score from scratch may seem intimidating but we’ve put together a couple of simple steps to help you get started in no time –

  • Opt For Personal loans or Micro loans

get low interest loan

One of the best options to help you build your credit score is to avail micro loans/instant loans or personal loans. You can get a loan amount from as low as Rs. 5k to Rs. 20k. This way, you can repay your loan on time easily, thereby helping you build your credit score.

Additionally, as these loans do not require collateral, they are easier to avail, and can be disbursed within just a few hours.

  • Apply with a Co-Applicant or Guarantor

apply with co-applicant for loan

You can also try applying for a credit card or loan with the help of a co-applicant or guarantor who has a high credit score.

However, availing this option means that you will have to repay your debt on time without fail as not doing so will severely impact the guarantor or co-applicant’s credit score. Go for this only if you are sure of your repayment ability.

  • Get Credit to Build Your Credit Score

get credit to build credit

While high-ticket loans and luxury credit cards may be out of your reach for now, the best option would be to start off with a secured credit card. 

A secured credit card is a credit card that is backed by a cash deposit such as an FD. Essentially, this credit card is provided against a collateral which means that not only will the interest rates be lower, it will be easier for you to avail as well.

These cards are usually given to those with little or no credit history to help them build one. So, if you are looking to build your credit history, this might be a great option for you

What Next? 

next steps to build credit score

Now that you know how to build your credit score, here are the steps you need to take after –

  • Repay your bills and EMIs on time. Delaying it even by a single day can negatively impact your credit score
  • If you have availed a credit card, you must always aim to repay the bills in full instead of opting to pay just the minimum balance due
  • In case you’re a co-applicant for a loan, you must ensure that the other person is also making the timely repayments
  • Do not take multiple loans at the same time. Not only will it burden you financially, your credit score will also be negatively impacted as you will be perceived as ‘credit hungry’
  • Last but not the least, have patience. Rome was not built in a day and you definitely cannot build your credit score in a day. In order to have decent credit history, give it at least 6 months and check your credit score regularly for mistakes, if any.

In Conclusion

Building a good credit score does not have to be complicated. All you need to do is follow certain simple steps to get started and follow a disciplined debt repayment schedule. 

Having a high credit score is an advantage in every way, whether it is to avail a credit card, get a loan at low rates of interest, or to get quick approval on your loan applications. 

Did you know that Money View, one of the most popular lenders in the country, provides personal loans to those with no credit scores? 

What’s more? You can avail a low loan amount and we’ll even help you get started on your journey to build a good credit score. Visit the Money View website today and apply!

Alternatively, why not download the app here?? 


Meghana Suresh

In an ideal world, Meghana would spend all her days curled up with a novel. But she found the next best thing and is enjoying her stint as a content writer at moneyview trying to help others understand the nuances of all things finance.

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