How Do You Build up Your Credit Score Your Way, and Maintain it in the Long Run?
- Sandip Makavana
- 2 hours ago
- 4 min read
Getting easy money using a credit card, mortgage loans, and personal loans seems so appealing to our minds. Right? However, these financial games involve some rules, regulations, and certainly your finance report card- your credit report. These financial accessibilities bring an in-charge in your life. In this blog, we’ll read about some of the smart tips to maintain a good credit score in the long run, that will boost your credit like a rocket!
Understanding Credit Score & Credit Report
What is a Credit Score?
Credit Score is a three-digit number on your credit report ranging from 300 to 900, representing an individual’s creditworthiness. It is also known as CIBIL score, Equifax score, Experian score, or CRIF High Mark score.
Credit Report
A Credit Report includes financial reliability and repayment history, or, say, the creditworthiness that will enable a lender to identify how financially responsible the individual is! It includes your current balances, Loan amounts, Account types (Credit types), and Payment history.
Simple Steps to maintain a Good Credit Score in the Long Run!
While building a credit score is a long process, you must know the importance of the baby steps taken toward financial wisdom. A financially responsible behavior to your to-do list every day and achieve a habit of good credit health. Here are some wise steps to build up your credit score your way.
On-Time Payments
Not to mention, a credit score is your certificate that shows how financially responsible you are. And it is highly associated with the monthly payments you make to cut off your debt. Making your payment from time to time, whether for loan repayment or credit bills, would keep your credit score at its peak. Here are some of the specific ways to pay off your debt in smart ways, such as, debt consolidation, balance transfer credit card, and debt management strategy.
Do not close your Bank Account
The older your bank account is, the wiser (stronger, maybe!) your creditworthiness is! In financial language, the FICO score of your credit report is driven by the age of your oldest account and the average age of your other accounts. This span of your credit makes the 15% strength of your FICO.
What is a FICO score?
A three-digit number that is generated in your credit report represents how likely you are to repay the loan.
Have diverse Credit Modes
10% of your FICO score is built up from how effectively you can manage different types of credits. A person who uses a credit card, a mortgage loan and a personal loan would have a stronger credit mix than a person who only uses a credit card as a mode of financial convenience.
Do not Apply for new credit cards too frequently!
If you are one of those people who like to enjoy benefits when getting a new credit card every few months, then you are the one who should be alert right now. Every time you knock on the lender’s door for a new credit card, the lender will look for your financial identity card, i.e. your credit report, to find how trustworthy you are. The more frequently you apply for a credit card, it negatively impacts your credit.
Be an Authorized User
Ask your parent and loved ones to add you as an authorized user; it will build you a unique reputation on your credit report. Provided their credit profile must have a good financial reputation, a.k.a good credit history.
Consolidate Your Debts
This is the most effective way to easily maintain your credit while it also simplifies your repayments. When you have multiple debts, consider buying a low-interest-rate loan and consolidate those old debts into one. It will help you save a good amount of money, and also your monthly EMIs will be united as one.
Keep a watch on your Credit!
Keep a regular watch on your credit report. Especially if it shows late repayment on a high-interest rate loan/credit, it negatively impacts your overall credit health. Check for identified bank accounts in your name due to identity theft. If you find any, do not wait for tomorrow, draw the attention of authorities right now.
If your application is genuine, generally, the credit bureau takes 30 to 45 business days to resolve the credit card disputes.
How Long Does it take to Build a Good Credit Score?
It depends on the factors that have made your credit slip off the cliff. There are no definite points assigned to each financial action you take. But, by keeping all these tips in mind, you can slowly and gradually bring your credit score to its zen state.
Maintaining a good credit score is inevitable in your financial journey. A good credit score not only represents your financial awareness but also enhances your chances of getting better loan offers, top-tier credit cards, low interest rates and a reputation in the lender’s eye indeed!
By adopting these habits and staying informed about your credit health, you're taking significant steps toward a brighter financial future. There are several genuine websites that give you free credit score access. You can simply monitor your credit score by visiting these reputed sites.
Always keep up your credit score!