Maintaining a good credit score is a prime indicator of your financial well-being and offers a bevy of benefits. From discounted interest rates on loans to smaller security deposits, a good credit score lets you enjoy a range of privileges.
An individual’s credit score is incredibly important for their overall financial picture. Lenders utilize this information to predict the risk of lending to a borrower. If your credit score is high, you are more likely to be given a loan. At the same time, if the score is low, lenders may look at it as a risk to lend you the money. Here are a few ways to maintain a good credit score.
Know What Constitutes Your Credit Score
The better you know about what constitutes your credit score, the easier it will be to take care of it. Your score primarily consists of a total of five things – your payment history, the mix of type of credit, credit age, recent credit, and level of debt. Being disciplined towards your EMIs and making timely repayments helps keep your credit score in check.
Never Max Out Your Credit Cards
It is not healthy for your credit score to max out your credit card. It is advisable to spend only up to 30% of your credit limit and pay your credit card bills before the due date. This helps you in maintaining your score and avoid unnecessary fines and penalties.
Limit Your Credit Applications
Too many loans or credit card applications can also impact your credit score negatively. It’s recommended to apply for any kind of credit only when it’s necessary.
Don’t Discontinue Old Credit Cards to switch to a new one
When a card is discontinued, the provider no longer sends updates to the bureau about the credit, placing less significance on inactive accounts. In the long run, this can negatively impact your credit score.
Check Your Credit Report Regularly
It’s not uncommon for credit reports to have errors. So it’s essential to check your credit score regularly, and if you observe any dip in the report that you believe should not occur, you must notify the appropriate credit rating agency so that the error can be investigated and corrected.
With the help of a good credit score, you can attain financial flexibility and improve your creditworthiness. If your credit score is decent, there’s a higher possibility for you to be eligible for all kinds of loans. However, the process of calculating the credit score might sound confusing. But don’t worry. Clix Capital is here to help. Clix provides an accurate credit score for free and helps you map out your credit eligibility with ease. By getting an accurate score, it becomes easy for you to manage your finances and take better financial decisions. Just visit: https://www.clix.capital/credit-score/.