Your ultimate guide to maintaining a good credit score

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Subscribe to enjoy similar stories. A good credit score is vital to securing a loan and negotiating a lower interest rate. Building a good score takes time and depends on several factors.

However, not all these factors affect your credit score equally. Your repayment history, for instance, matters much more than the number of hard enquiries on your credit report. A hard inquiry, also known as a hard pull or hard credit check, is when a lender or financial institution reviews your credit report to assess your creditworthiness.

These usually occur when you apply for a new credit card, loan, or other form of credit. Here’s a rundown of the most important factors that affect your credit score and what you can do to improve it. Repayment history: This is one of the main factors that affect your credit score, and it's pretty straightforward.

The more often you pay on time, the better your credit score. Even a single late payment can damage your score. If you have several credit cards or loans, it’s a good idea to set up auto-payments.

Having more credit cards can help boost your credit score because of this factor. For example, if you have 20 credit cards, 20 on-time payments will be recorded on your credit report every month, even if you don’t use all of them. Just make sure there are no late payments.

Also read: How a single late payment can decimate your credit score Credit utilisation ratio (CUR): This is the proportion of your total credit limit that you actually use. Consider this the second-most important factor for your credit score. The lower your CUR, the better.