For individuals with existing loans or credit cards, consistently paying on time is the most effective way to build their credit score. Contrary to popular belief, increasing credit usage does not improve the score. Manish Jain, the country managing director at Experian India, emphasizes that paying off excess loans can also enhance the credit score. For those new to credit, there are several strategies to establish a good credit history. Parijat Garg, a credit scoring consultant, suggests that taking consumer loans, using credit cards, and opting for gold loans are effective methods, with the first two being more preferred. Garg explains that availing of loans, introducing some credit, and timely repayment will help build the credit score. For instance, a recent graduate with no previous loans will have no credit information available, which could raise concerns for banks when they apply for a loan. Introducing credit data can be simple, such as taking out consumer loans or secured loans, or using credit cards backed by a fixed deposit.
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