Essential Habits to Maintain a Good Credit Score 

Credit score is a measure of your creditworthiness for loans and credit cards. It is crucial to have a solid credit score for good financial health. And in order to get there, you must follow a few healthy financial habits. Let’s take a look at some tried and tested ways to build a good credit score, which will ultimately help you to obtain a good credit score.  

Make regular payments  

Many people fail to manage their finances properly and as a result of which they default on payments. You must keep in mind that in order to build a good credit score you should aim at making regular payments, and if possible, in full. If payments are made on time, it denotes that you are a responsible credit user, who is worthy of securing credit cards and loans.  

Avoid exhausting credit limits 

With credit cards the urge to spend more naturally increases. And if you want to build a good credit score, you must put a check on that urge. Why? That’s because spending more can exhaust your credit limit, thereby lowering your utilization ratio, which in turn can potentially hurt your credit or CIBIL score.  

Maintain a diverse credit portfolio 

People with good credit scores usually tend to have diverse credit accounts. Having a credit mix simply shows that an individual is capable of managing all kinds of finances efficiently. This also leaves a positive impact on your credit score and report. The right idea behind this is to get the perfect balance of secured and unsecured loans. If you have too many unsecured loans or credit card debts, the bank might not consider you to be a responsible borrower.  

Monitor your credit report regularly 

Keeping an eye on your credit report is essential to get an understanding of your financial behavior and your credit rating. Plus, if you review your credit score regularly, you can easily get errors rectified, if any. In case you come across any inappropriate information in your credit report, do not hesitate to report it to the credit bureaus.  

Make credit enquiries wisely  

Did you know that every time you enquire about a credit card or loan, the banks evaluate your credit score to find out how efficiently you have managed your credit so far. This is termed as ‘hard pull’ which when overused can leave a negative impact on your credit score.  
So, instead of checking your credit score with the banks, you can check your credit score directly with the bureaus. These enquiries are known as soft enquiries which don’t bring down your credit or CIBIL score. 

Think twice before closing accounts 

Credit scores take into consideration your credit utilization ratio, therefore closing credit accounts may lower your total available credit and further impact your credit score in the short term. This can also impact the average life of your credit history. If you are planning to close an account to resist the urge of exhausting balance, then that might be a good idea. Or else, keep your credit accounts open if you have a good payment history alongside a low balance. 

Make multiple payments every month 

Rather than making one payment on your credit card, try making multiple smaller payments throughout the month. This will enable you to lower your balance, make timely payments, and further keep your credit utilization ratio low. 

Switch to autopay for credit cards 

If you can’t afford to pay off the entire balance every month, sign up to automatically pay at least the minimum due. However, if you’re feeling flush you can always consider adding a second payment, but if you at least pay the minimum, you’ll be able to avoid a late payment remark on your credit report. 

The Bottom Line 

If you adopt all of the above-mentioned habits you can keep your credit in good shape. No matter what, monitor your credit reports regularly to track your progress and set your goals clearly. Remember, with a little patience and consistency you can build solid credit habits and a healthy financial outlook.