Your credit score is a measure of how responsible you are with borrowed funds andacredit scoreof 750 and above is considered to begood, as it showcases financial fitness. This gives lenders a reason to view you as a worthy, reliable borrower. In turn, you can get a better rate of interest on a loan or get a higher sanction. If you already have a credit score of above 700, here are 5 effective habits to follow to maintain your credit score.
Monitor your credit utilisation ratio
Credit utilisation ratio is a calculation that measures credit usage against your credit limit. This ratio should always be 30% to ensure that your credit score remains stable. To do this, you must ensure that you limit your spending. For example, don’t spend via your credit card up to its full limit month after month.
Don’t cancel old credit cards
As time passes, you may considercancelling your old credit cards. However, note that if you are successfully able to maintain them and pay the bills (in full) on a timely basis, your old credit cards will show a richer credit history. In turn, this willwork towards bettering your credit score.
Check your eligibility for every new loan that you borrow
With the loan market widening and new financial institutionsoffering loans, you have access to various options when you seek credit. But, this doesn’t mean that you apply for a loan in an ad-hoc manner. When applying for one, ensure that you select a loan option after checkingyour eligibility for the same. This maximises your chances for approval. Doing this is important, as it ensures that your application isn’t rejected, which lowers your credit score.
Check your CIBIL reportregularly
It can so happen that yourCIBIL reporthas errors. For example, your lender may forget to inform CIBIL that you have closed your loan. Regularly checking your CIBIL report will bring to light such errors and will allow you to correct any mistakes at the earliest, thereby maintaining your credit score.
Take one loan at a time
Borrowing many loans at the same time is an indicatorthat you are greedy for credit. As a result, it lowers your credit score. So, a good way to keep your score intact is to ensure that you don’t take multiple loans simultaneously. Prioritise your needs and take loans one at a time to keep a high score intact.
As long as you implement these measures, you are sure to be able to maintain your credit score and improve it as time goes by.
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