Credit Score: 7 effective steps to follow to maintain good credit history
For financial health and stability, it is vital to build a strong credit history. One can take a number of steps which include paying bills on time, keeping credit card balances low, keeping track of credit score and opting for secured credit card.
Pay bills: Payment history is one of the key factors which affects your credit score. So, it is important to pay all your bills, including credit card bills, loans, and utilities, on time.
Keep credit card balances low: Maintaining low credit card balances relative to your credit limit can positively impact your credit score. Aim to keep your credit utilisation ratio below 30 percent.
Credit score: Start by checking your credit score regularly. This way, you can spot for inaccuracies and work to improve the score if it is low.
Use different types of credit: Having a mix of credit types, such as credit cards, instalment loans, and collateral, can demonstrate your ability to manage various types of credit responsibly.
ALSO READ: Five factors that greatly affect your credit score
Keep old accounts open: Closing old credit card accounts can shorten your credit history and reduce the average age of your accounts, thus lowering your credit score. So, you should keep older accounts open, even if you don’t use them often.
Secured credit card: If you have trouble qualifying for a traditional credit card, a secured credit card can be a good starting point. Secured cards require a cash deposit as collateral, making them easier to obtain for those with limited or poor credit history.
Be patient: Building a strong credit history takes time. Consistently following good credit habits over an extended period will ultimately result in a positive credit profile.
Maintaining low credit card
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