How can you boost your credit score as a student

As a student who's on the verge of entering the working life or even a seasoned young professional, it's never too early or too late to learn how to recover from financial setbacks, such as poor credit scores.

We realize it might be difficult to maintain a good credit score during your college life. But it's worth trying for, since it can open up a lot of opportunities as you lay down the foundations for your career and future.

After all, a credit score could be the deciding factor behind buying a car, home or even paying rent. With more money-lending services being made available to students, it's led to increased cognizance about CIBIL scores among students.

If you wish to start fixing your credit score, here are some suggestions:

Revolving debt over instalment debt

Put simply, revolving debt is what you incur when you're in the habit of using a credit card. Prioritize paying off your credit card bills over say, student loan instalments or rent bills, as the interest on your credit card bill can pile up much faster. To maintain a good credit score, your credit card utilization should be 30 percent (or lower) of your total limit as well.

So if you ever find yourself spending over this limit, make sure to cut down on your expenses until you've reached the 30 percent mark. However, sometimes your essential expenses may incur more than this limit which brings us to our next point.

Go for your own credit card

As long as you're a beneficiary of an account belonging to a family member with a good credit score, it shouldn't be too difficult to obtain a credit card. Once you do, however, make sure your credit card is not abused always exercise caution when using it.

Try for a higher credit limit

Being eligible for a higher credit limit depends on whether you pay your credit card bills regularly. As time passes on, your credit score will improve as long as you've been making your payments duly as well as if you've been maintaining your credit card spending under the limit of 30 percent.

If you apply for a higher credit limit on your credit card, your score is likely to improve as it will be easier to stick to the 30 percent rule. That said, if you're already struggling to make your existing credit card payments, a larger credit limit may not be the best choice.

Pay rent with your credit card

The more positive payments you have on your credit card, the better your credit score will get. Paying off your rent with your credit card will add a positive payment on your credit history as long as you duly pay it off yourself when the amount is reflected on your credit card bill. This amount should be paid off before the billing period of your credit card though as rent paid with your credit card can accrue interest as well which will reflect poorly on your credit score. We should also mention that this option may not always be available as some landlords may not be comfortable with accepting credit cards as a mode of payment.

Review your credit score regularly

As per the law, every individual is allowed to get one free credit report from one of the three major credit companies every year. Make it a habit to check your credit report at every opportunity as errors on these documents are more common than you think. Most errors that have been reported to these credit bureaus are usually pertaining to incorrect information such as a misspelt name, wrong birth date or sometimes even being accidentally declared as deceased. Imagine trying to apply for a loan if your credit file says that you're dead; that's just a headache no one wants to deal with.

At mPokket, we exist to provide financial independence to youth and empower them with the means to be economically self-reliant.

So of you are seeking some quick credit by way of an instant student loan or salaried loan and wondering where to turn, simply download the mPokket online loan app. Register by uploading a handful of documents, and post-approval, borrow instant personal loans of up to Rs. 45,000! mPokket loans for students and loans for salaried are credited straight to your bank account within 10 minutes.

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