In order to get access to credit, you first need to have a good credit score. This is obtained through a high amount of self-discipline while accessing your credit card as well as financial discipline.
Making mistakes is human, it’s something we all do; the important lesson here is to learn from our errors and try not to repeat them again.
Making a mistake in regards to your financial habits may adversely impact your score; hence it is better to follow a set of rules in order to maintain your credit score and eligible for availing a loan when you require them the most.
Rule number 1
Understand the ins and outs of how your credit score is calculated by your credit company.
Majority of the credit companies use financial payment history and the credit to debit ratio when calculating your credit score. These two options together makeup to more than two-thirds of how your credit score is assessed.
Rule number 2
Make sure that your payments are on time
Payment of dues is an important part of maintaining your credit score. A late payment will show up in the report for an entire duration of more than seven years. If you are one of those busy professionals who sometimes forget to pay your dues on time, all you have to do is set up an email or SMS reminder a day or two before, and ensure that the due payment is made in a timely manner.
Rule number 3
Patience is key!
You have to be patient while waiting for the credit score to rise. Once you start making the necessary improvements, the change will be gradually visible on your credit score.
Rule number 4
Consistency is important
In order to obtain the perfect score, it is absolutely essential to keep maintaining it constantly. Make sure that your bills are paid before the reminder call or due date and make a careful note of your expenditure and budgeting as well as spending that you do. Only by establishing an arrangement, you will be able to plan your finances and meet your loan reimbursement obligations steadily over the course of several years.
Rule number 5
Make sure that there are no mistakes in your credit history
If you have a good payment history and you accidentally make a late payment once, there is a chance that your creditor might not make that into the report if you call and tell him, asking him to make an exception once in a while. Of course, this is only if you and your creditor are on good terms with each other and he or she might do it out of good faith.
Rule number 6
Do not apply for new credit often
Frequently applying for new credit can often have a negative impact on your credit score. This also includes frequent loan applications, buying new credit cards or any other form of credit. When the creditor sees a lot of applications within a certain time period, they might consider you to be desperate for credit which will ultimately end up affecting your credit score in a negative way.
Rule number 7
Get the correct mix of credit
It is imperative to have a correct mix of credit accounts, having only one type of credit account will end up making your score lower. There is a marked difference between applying for secured as well as unsecured loans. Applying for an unsecured loan such as personal loans or even having credit card related debt is surely going to pull down your credit score.
Also Read: 8 Habits for a High Credit Cibil Score
In today’s world, credit is a tool that is essential to have in order to realize our dreams. Hence, having a perfect credit score is essential to be an applicant for loans and various other credit related applications.
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