Tips to Maintain a Good Credit Score

A CIBIL Score, commonly known as a credit score, is a numerical representation of an individual's creditworthiness. With lenders such as banks and financial institutions using it to evaluate your eligibility for loans or credit cards, maintaining a good CIBIL Score is crucial. The score ranges between 300 and 900, with a number above 750 generally considered impressive. However, ensuring a high credit score demands meticulous financial habits and decisions. Here are some tips that could help.

First and foremost, ensure prompt payment of all your dues. Late or missed payments indicate potential credit risk, negatively impacting your CIBIL Score. Even a single missed payment can cause a considerable drop in your score. Therefore, setting up automated payments or reminders can be an effective way to stay on top of your monthly dues.

Balancing your credit mix is another critical aspect. A blend of secured (like home loans, car loans) and unsecured loans (like personal loans, credit cards), demonstrates to lenders that you can handle multiple types of credit responsibly. If your credit profile comprises solely of unsecured loans, it might detrimentally impact your CIBIL Score.

Maxing out your credit limits isn't recommended. High utility ratios can make you appear as a credit-dependent individual, subsequently lowering your credit score. Keeping your credit utilization under 30% displays prudent financial behavior, thereby boosting your commercial CIBIL score.

Just as it is not good to over-utilize your credit, avoiding it altogether is detrimental as well. Lenders prefer consumers who actively borrow and repay credit. A dormant credit history due to a lack of any new loans or credit cards can cause a decline in your CIBIL Score.

When dealing with credit cards, restraint is key. A habit of applying for new credit cards often merely for the sake of the benefits can land you in trouble. Every new application triggers a hard enquiry by the lender, which is recorded in your credit report. An excess of such enquiries can raise alarms about your credit hunger and negatively impact your CIBIL Score.

Lastly, regular checkups on your credit report are critical. Scrutinizing the report can help in identifying any discrepancies or errors. Whether it's a miscalculation or a fraudulent activity under your identity, a prompt correction can save your CIBIL Score from unnecessary damage.

In conclusion, maintaining a good CIBIL Score is not a one-time task, but an ongoing process. It requires you to adopt responsible financial habits and make smart credit decisions. Ensuring timely payments, balancing your credit mix, controlling credit utilization, actively using credit, restraining from frequent credit card applications, and routinely checking your credit report are all practices that can help you maintain a strong commercial CIBIL score. Remember, a good credit score is a gateway to a smooth financial journey.

For a seamless experience, download the Bajaj Finserv App to check your CIBIL score, access personalized offers, and manage your credit health on the go.