What is a Good Credit Score and 5 Tips to Maintain It

How Can You Maintain A Good Credit Score?

If you wish to maintain a healthy credit profile, here are a few simple and quick things to do:

1. Pay your bills on time every time

Since your repayment history is the essential factor in determining your credit score, pay each loan EMI and credit card bill on time to maintain it high. Set reminders or activate the e-mandate for timely payments so you don't miss a single due payment. Even a single missed payment may reduce your credit score by a few points.

2. Pay off your debts

Paying off the outstanding balances on your current debt accounts will help maintain your credit score and improve it over time. Pay off high-interest rate debts first and then proceed to low-interest ones. Doing that will help you become debt-free sooner and maintain the best CIBIL score for a long time.

3. Keep your credit card balance well below the limit

Credit cards come with a credit limit up to which you can shop using the card. However, exhausting the entire monthly credit limit projects you as credit-hungry and reduces your credibility for future credit. So, reduce credit card usage and maintain a credit utilisation ratio below 30-40% to maintain a good credit score.

4. Apply for credit sparingly

Obtaining loans has become extremely easy and quick these days. Lenders offer ample loan amounts to creditworthy individuals. However, you must evaluate your requirements before borrowing and apply for credit only if necessary. Overborrowing will reduce your credit score and make repayments challenging for you.

5. Check your credit reports regularly

A regular credit score check is a great step to maintain your credit score. You can identify any errors on time and get them rectified before they damage your credit score ranges. If your credit score drops, you can spot the reasons in time and take the necessary steps to save it.

Conclusion:

Now that you know what a credit score is and how you can maintain it. Take the necessary steps to maintain it and improve your eligibility for future loans. Since it is a crucial number that determines your creditworthiness, keeping it within the high credit score range is important to get the required funding at the right time.

FAQ:

Yes, any score above 700 is a good CIBIL score.

The credit score ranges from 300 to 900. So, a 900 credit score is the maximum score you can get.

Achieving a credit score of 800 requires planning and responsible credit behaviour. You must make all your due payments on time, diversify your credit portfolio, and use credit responsibly to achieve an 800 credit score.

Pay off all outstanding balances, never miss payments, and avoid making new loan applications to raise your credit score in 60 days.

Check your credit report to identify and rectify any errors to increase your credit score in 30 days. If your report is error-free, pay off your debt balances, diversify your credit profile, and avoid credit card usage to increase your credit score in 30 days. However, getting noticeable results may take a longer time.

Your repayment history is only one of the factors affecting your credit score. If you pay your bills on time, it might be low due to other reasons like high DTI or CUR, multiple credit applications recently, errors in the credit report, etc.