You Have a Strong Credit Score but Can You Maintain It?

Credit scores play a significant role in your ability to get various approvals, like that for credit cards, personal loans, etc. It is a sign of your creditworthiness, that is, how much able you are to repay any borrowed amount.

Now, having a good and strong credit score, probably over 700, is positive for your future and upcoming financial endeavors. However, for how long will the score remain strong and good? How to continue keeping it at the same level?

Tips to Maintain High Credit Score

Here are some of the most important tips you may know:

Paying EMIs on Time

A very significant measure, you need to ensure that you keep paying any remaining EMIs also on time to keep up a good score. In fact, it is but a simple way to keep the credit score high. EMIs can be for various financial products such as loans, credit cards, etc. Know that paying full in time is crucial.

This matters because it shows your creditworthiness; your ability to repay any borrowed amount. Late payment does not just come with penalties, but also lowers the credit score considerably. One of the ways to keep doing so is letting the recurring payments being made through the autopayment mode. You can also choose reminders so you don't miss a payment.

Credit Utilization Ratio (CUR)

CUR and credit score are inversely proportional to each other. Keeping CUR below 30% is considered one of the best ways to maintain a good credit score. For this, it is suggested that you do not use more than 30% of your credit limit.

A high CUR shows your heavy dependence on credit, and that lowers your creditworthiness, thereby lowering the score too. Make it not a habit to spend with the card every time, as that could make you cross the 30% limit. You may otherwise consider getting your credit card limit extended. It is also suitable sometimes to get an additional card issued.

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Keeping Old Accounts Active

In this case, you need to know that longer credit histories support higher credit scores. Getting your old accounts deactivated may negatively impact it. So, do not choose to shorten your credit history even when you're no more using the old accounts. Longer credit histories are a way to gain the confidence of the lenders.

You can do so, for example, by keeping your old credit cards open even when you're no more using them. More data to assess one's financial behavior is a plus for the lenders and you.

Regularly Checking Credit Report

To fix any possible errors that may wrongly lower your credit score, it is important that you keep a check on your credit report time to time. The mistakes can be made from the administrative side or by lenders, and can lower the credit score. Getting any errors disputed and resolved will help you enjoy the true credit score you deserve and the resulting benefits.

Every three months, review the report. Know that you own a free-of-cost credit report once in a year in India from any of the four credit bureaus. An early detection can you a lot. Because credit report summarizes your credit history, they need to be anything but right.

There are additional ways to maintain a high, healthy credit score, some of which also include monitoring of the co-signed loans and planning credit inquiries.

A good credit score is bout being financially responsible toward yourself, your family and friends, as well as your lenders and the country.

Why Is It Important to Maintain It High?

A high credit score is going to serve you well anytime.

You can get to enjoy so many perks when you have successfully been maintaining a high/healthy credit score:

• You may get lower interest rates on loans
• Your insurance discounts may be higher
• You may get to enjoy some better rental options
• Your negotiating power increases
• You can enjoy higher credit limits
• A higher loan amount may be allowed to you
• Your loans are going to be approved quickly
• There are more rewards on credit card users with good credit scores

While there can be many more advantages, you will find them all by yourself as you go ahead with your financial journey and keep a good score at all times.

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