Six Ways to Maintain your Credit Score

credit score

Isn’t watching your credit score crossing 700 one of the best feelings in the world? It is, right? A good credit score becomes a gateway to one’s dream lifestyle by getting the cheapest loans and gratifying rewards. However, the journey continues beyond elevating the CIBIL number above 700. One also has to maintain it on the same wavelength for long-standing benefits. Here are five things to be mindful of to keep a healthy credit score. 

1. Make timely payment of dues

Being punctual about paying credit card bills is a non-negotiable step for maintaining a healthy credit score. Yet, credit card bills are usually given the least priority during financial crunch. If you cannot pay your monthly credit card bill, you should at least pay the minimum due to keep your score from dropping. However, the interest charges will add up, costing you a bomb. 

2. Maintain a healthy credit utilization ratio

One is often tempted to use all the credit limits provided or sometimes even beyond. Enticing as it is, one should stay within the suggested credit utilization ratio or CUR. CUR is the credit the customer uses out of the total credit issued. Experts recommend utilizing at most 30% of the total credit limit. 

3. Don’t apply for too many credit cards at once

The phrase “more the merrier” doesn’t go well with credit card applications. Binge-Applying credit cards deem you as credit hungry. Result? Credit agencies refrain from increasing your credit limit, let alone approving the loan sanction. 

4. Steer clear of hard inquiries

Hard inquiries occur when the credit looks into your credit file to know your creditworthiness. Such frequent hard inquiries can hinder the stability of your credit score. While hard inquiries are inevitable, an excess of it will blow your credit score. 

5. Never cancel your old credit card

Cancelling old credit cards seems like a no-brainer when one isn’t using them anymore. Unused credit cards only attract annual charges and nothing more. However, did you know cancelling them will pull down your credit score? Hence, you can downgrade the card in question instead of cancelling your old credit card. For instance, downgrading a Coral card to a Platinum card can nullify your annual fees. 

6. Keep up with your CIBIL

When one checks their credit score, it is called soft inquiry. And contrary to popular belief, soft inquiries do not hamper your CIBIL score. It is recommended to check your credit score consistently. This will keep you on loop with any line of credit taken without your permission, and the same can be reported to the credit bureau immediately. 

Your credit score can make or break your credit journey. How you use your credit cards reflects a lot on your credit score. It is crucial to use your credit card well to attract more lines of credit your way.

 

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