Timely payments make up the biggest part of your credit score. Even a single late payment can drag your score down by 50-100 points. Set reminders or use auto-pay to ensure credit card bills, EMIs, and utility payments are cleared before the due date. Maintaining a record of on-time payments across all accounts signals financial discipline to lenders.
Keep credit utilisation low
Credit utilisation—the percentage of your total limit you actually use—should ideally stay below 30 percent. If your card limit is Rs 1 lakh, try to keep monthly spends under Rs 30,000. High utilisation suggests you’re dependent on credit, which can make lenders wary. Paying off dues multiple times a month or requesting a higher credit limit can help keep utilisation low without cutting spending.
Avoid too many loans or credit cards
Every time you apply for new credit, the lender runs a hard inquiry on your report, which can slightly reduce your score. Applying for several cards or loans in a short time signals credit hunger. Instead, build a stable mix of secured and unsecured loans over time, and apply only when necessary. Consistency, not volume, improves your score.
Check your credit report regularly
Errors in your report—like old loans showing as active or incorrect payment defaults—can hurt your score without you realising it. Check your CIBIL, Experian, or Equifax report at least twice a year. If you find inaccuracies, raise a dispute immediately. A clean and updated report ensures your score reflects your true repayment history.
Don’t close old credit cards suddenly
Older cards strengthen your credit history and contribute to a longer average account age, which positively affects your score. Even if you rarely use a card, keep it active with small recurring payments. Closing it may reduce your available credit limit and spike your utilisation ratio, both of which can pull down your score.
Keep loan tenures balanced
Stretching a loan over too long a tenure lowers EMIs but increases total interest and keeps you in debt longer. On the other hand, short tenures with high EMIs can strain cash flow and risk missed payments. Choose a tenure that fits comfortably within your monthly budget—consistent repayment matters more than speed.
Maintain a healthy credit mix
Lenders prefer a balanced profile with both secured (like home or car loans) and unsecured (like credit cards or personal loans) credit. Having only one type can limit your score growth. A good mix shows you can handle different credit products responsibly, which adds stability to your financial image.
Avoid co-signing or guaranteeing loans casually
If you co-sign for someone and they default, your score takes the hit too. Be selective before guaranteeing loans for friends or relatives. Monitor such accounts regularly so you’re not blindsided by missed payments affecting your record.
The takeaway
Keeping your score above 700 isn’t about quick fixes—it’s about steady, responsible habits. Pay on time, borrow wisely, and monitor your credit health regularly. With consistent effort, you’ll not only maintain a strong score but also enjoy faster loan approvals and better financial flexibility.
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