Credit report holds great importance, especially in today's time as it contains all the information about your past loans, payments and transactions with lenders and creditors. This report is sent to all the banks, lenders and financial institution as when you approach them to get a loan they will first access your credit report and on the basis of that they will decide whether they should give you a loan and if they give the loan, what interest rate will be charged from you. It is the major reason why the credit report is crucial, and it is necessary to be maintained well. 

Credit reporting agency or a credit bureau is a kind of agency that create your credit report and sends it to all the related personnel. The agencies must create the correct credit report as it affects your credit score and the credit record. All your future borrowings depends on the credit report so you must check it thoroughly and check if there is any mistake in it. You must get it corrected as soon as possible. There are various ways in which you can improve your credit report and make it look good.

Tips to enhance your credit report

Don’t keep any outstanding bills

The first thing any lender see in your credit report is how quick or consistent you are in repaying your debts. As if the report shows that you pay the debts late then the lender will hesitate to grant you the loan as he will find it risky and if he approves it he will charge higher than the standard interest rate. So, you must pay all your bills timely so that your credit report looks good and you won’t face any issue to get credit in the future. You must pay the outstanding bills in time and pay the complete amount as agreed with the lender. It put a positive effect on the credit report and enhances it.

Keep your credit utilization ratio low

The credit utilization ratio is the ratio of total credit available for you and the amount of credit used by you. For instance, if your total credit limit is Rs 30000 and you are using Rs 6000 every month, then your utilization ratio will be 20%. For the betterment of the credit report, you must keep the credit utilization ratios as low as you can. Most of the lender hesitated to give loan to the people having a credit utilization ratio above than 30%. Low ratios mean that you can handle the credit efficiently and can repay it timely. Credit card balance affects the credit utilization ratio to a great extent, so you must keep it low.

To conclude, the credit report is crucial for everyone in today’s credit-oriented economy, and you can take care of a few things to ensure that it remains good.