How to maintain a good credit score?
Maintaining a good credit score is all about being consistent and disciplined with your money habits. Here’s exactly what works for me:
- I always pay my EMIs and credit card bills on or before the due date. Timely payments keep my score healthy and save me from late fees. I never wait for the last date.
- I never use above 30% of the total limit. In extreme cases, I repay the previous amount even in advance.
- I do not overspend with my credit cards, so that I can make credit cards rewarding, not a burden. Otherwise, there will be high chances of missing payments.
- Applying for lots of new credit cards or loans at once is a negative indication for lenders. Try not to apply for more than 6 loans or credit cards every 6 months.
- I check my credit report once every few months to catch any mistakes early. If there is an error, I reach out to them as soon as possible to resolve it.
- I keep my oldest loan and credit card accounts open, even if I barely use them. A longer credit history always works in my favour.
In case the credit card has high fees and fewer benefits and utilisation, I close them within 6 months.
Following these simple habits helps me maintain a good credit score for years, and they tricks apply to anyone who wants to maintain or improve their credit history.