No tension of money if you maintain good credit score Keep these 5 things in mind | Money will not be tight if your credit score is good! Always keep these 5 special things in mind


Money will not be tight if your credit score is good! Always keep these 5 special things in mind


  • Credit score reflects the financial health of an individual
  • A score of 750 or higher is considered good
  • It tells how much the borrower is able to repay the loan in the stipulated time

New Delhi: The credit score gives an idea of ​​the financial health of an individual. Credit score is basically a 3-digit number presented by credit rating companies to potential lenders about the creditworthiness of a borrower based on credit history. Scores range between 300-900 and a score of 750 or more is considered good. The credit score tells the lender how well the borrower is able to repay the loan in a stipulated time.

A good score makes a person credible and qualified, which increases the expectation of getting better interest rates and opens up a host of benefits including access to loans and credit cards with the most favorable terms. Good credit score can be achieved by practicing good financial habits. Nidhi Malik, Vice President, CSR & Communications Home Credit India has shared information on how to improve credit score.

To maintain a good credit score, keep these 5 points in mind:

Maintain a healthy payment history

A credit score depends a lot on one’s payment history, as it shows how responsibly a borrower makes payments. Hence, it is advisable to make timely payments if there is any loan, EMI or credit card repayment schedule, so that there is no negative impact on the credit score. Methods such as setting up due-date alerts, setting reminders or automatic payments for regular payments can prevent the default. Ensure that sufficient amount is available in the respective loan account for EMI payment every month. Be sure to remember the credit card payment date as well. Make sure to pay the minimum amount due when you are unable to pay the credit card bill in full.

Maintain Credit Utilization Ratio

Credit utilization ratio gives an idea of ​​one’s credit utilization. It is calculated by dividing the credit utilized by an individual by the total credit available to him. It is the second major factor in credit score. Ideally the credit utilization ratio should be less than 30 per cent of the total available credit limit. The lower the credit utilization ratio, the more beneficial it is to have a high credit score from the point of view of financial security.

check your score regularly

Credit scores require periodic checks to detect discrepancies and notify the credit authorities immediately. Keeping a track of the credit report also helps in knowing what may go in favor or against the loan. It is important to remember that a person is entitled to a free credit score once in a year.

Take care of old account also

How long someone’s credit history is also affects the credit score. The calculation is based on the oldest credit account, the newest credit account and the average age of all the accounts. Hence, it is advisable to keep an eye on old bank accounts, as they indicate a long association with the bank, which leads to a good credit scar. The higher the average credit age, the more financially favorable it is, as the credit history of those accounts will not remain on the credit report.

plan credit carefully

All previous borrowings are also taken into account in the credit score. Too many unpaid loans can hurt the credit score, as it shows the inability of an individual to manage finances. Timely steps towards keeping the credit score stable and good will yield good results in the times to come. If the user adopts these measures, it will help him to improve his credit score.

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