When it comes to credit score, it takes a lot of time and patience to create a good one. If you have ever applied for a credit card or any sort of loan, you must be aware with the fact that how crucial it is to maintain a credit score i.e those three-digit figures. A credit score is a measure of your creditworthiness and it is important to maintain a good score of 750 or above out of 900. But, maintaining a good credit score is not everyone’s cup of tea. There are certain important things that you need to take care so as to sustain your score.
Take a look below to know about the important tips that will help you maintain a good credit score:
Make timely payments
Yes, it is absolutely necessary to maintain a good payment history because it is the one of the most important factors that affects your credit score, by nearly 35 per cent. So, if you want to maintain a good score, no doubt timely payment of credit card outstanding and EMIs on loans can do wonders for you.
Keep an eye on your credit card balance
You should always be aware of your credit card balance as it can drastically impact your credit score. Try to use only small portion for your credit limit. Use your credit wisely by not using it more than 30 per cent of its actual credit limit. Actually, the proportion of your balances in relation to your credit card limits can affect your credit score tremendously.
Apply for credit card/loan only when you need
Always try to apply for a credit card/loan, when there is a genuine need. Too many fault inquiries in a short period of time can affect your credit score in a negative manner. So, go for a credit card/loan when you need it the most.
Spend within your income
Whenever you apply for a credit card/loan, it is you who need to decide whether you will be able to afford it or not. One should always spend within their earnings as it will prevent the incidences of overspending.
Improve your payment patterns
It is highly important to make the timely payments on your existing debts to boost your credit score. Ensure that all your outstanding balances are paid in full by opting for the automatic due deductions, popularly known as ECS, from your account as it helps you in maintaining a good credit score.
So, keep these above tips in mind to join the 750+ credit score club.
The author is Founder, Deal4Loans