4 Ways to Maintain a Healthy Credit Score

Did you know that maintaining a healthy credit score has its own advantages? Yes, a high credit score pays you back in terms of your loan approval and offering a low interest-rate.

What’s more, having a good CIBIL score also helps you when you want to avail a loan or apply for a credit card.

However, maintaining a healthy score is what takes some efforts. Let’s help you with 4 quick ways to build or maintain a strong credit score.

1. Treat all debts equally when it is the time to repay

You should know that your credit score / CIBIL score considers revolving debts (credit cards) and EMI based loans.

Continually having a balance on your credit cards can reduce the score and may hurt your probability for a loan approval in future. It can also hurt if you have plans to open other credit card accounts.

If you have an existing loan and availing the personal line of credit which offers a low interest-rate, do not go ahead and prioritize other credits if it means ignoring that expense. Thus, for your credit score to improve, treat all debts as equal and repay one and all by their due dates.

2. Ensure that you pay all your bills on time

As you know that your payment history makes for around 30-40% of your credit score, you should take all pain to pay all bills on time to keep maintaining a good credit score.

If you don’t remember due dates, it’s time to stay organized by setting up alarms or payment reminders so that you don’t miss out any bill.

What’s more, if you know the dates when your salary is generally credited or you get funds from other means, you can set up an auto debit and relax.

3. Keep away from applying for a new credit card, if possible

When you apply for new credit cards, such applications eat up 10 percent of the CIBIL score. Yes, whenever you apply for a new credit card, it initiates a ‘hard enquiry’ into your credit report, making it take a hit.

Thus, unless it’s urgent, it would be suggested to not apply for a new credit card or even new loans if you are willing to keep up your CIBIL score.     

4. Try to pay full payments and if not, at least the MINIMUM AMOUNT DUE

It would be a good idea always to pay your credit cards balance in full and if not, at least the Minimum Amount Due. Even though paying the Minimum Amount Due is not good because that would mean stretching the payment into years, you can still pay it if you can’t manage to pay full.

Also Read: Build a Good Credit Score in 4 Simple Steps

By doing so, your financial profile won’t get reported to the CIBIL authority, and you would manage a strong score.

The Bottom Line

Maintaining a healthy credit score will assist you to avail a low interest-rate if you plan to take out a personal loan in future. Hence, try to incorporate all the vital points to keep managing a high credit score.    

About This Author

Arwind Sharma Joined: December 7th, 2017