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5 ways to maintain your credit score


By Sidharth V, CRO, KreditBee

A good credit score is more than just a number used by creditors to assess a borrower’s creditworthiness. It is a key part of a person’s financial profile and indicates whether or not they have a good credit history. One type of credit score that lenders look at before approving loan applications is a person’s CIBIL score. Lenders determine loan terms based on this assessment, and applicants with a high CIBIL score usually get favorable terms.

While it’s impossible to fix your credit score overnight, here are some steps you can take to see a gradual improvement in your credit score over time.

Maintain a strong repayment history

A person’s CIBIL score is negatively affected by late payment of loan EMIs or credit card charges. In addition, they are saved in the history, where other lenders can review them and determine that the borrower is risky. You have to budget and plan appropriately to avoid this. Making sure IMEs and payments are on budget is a good place to start. Secondly, one must ensure that their payment accounts have enough money so that automated payments can be made without any problems. In this way, one can avoid defaults on their credit report and not miss their due dates.

Use your old credit cards

Using an old credit card with a solid history of on-time payments can help boost your CIBIL score. Thus, it is necessary to maintain his oldest active credit accounts if he wants to increase his CIBIL score.

Do not submit multiple credit applications

Submitting multiple credit applications over a short period of time can hurt your credit rating. Lenders see this as credit-greedy behavior, as these are documented as hard requests. Wait at least a few months between applications and only apply for new credit if they absolutely need the money. This gives everyone plenty of opportunities to increase their score and, therefore, their eligibility.

Track loans with a co-applicant

When a person signs up as a co-applicant for a loan, they and other applicants jointly bear the cost of servicing the loan. Therefore, they even share the responsibility for late or missed payments. So, as the non-payment of other co-applicants will also have an impact on his credit rating, it is essential to monitor these loans and ensure that other co-applicants pay their share of the IMEs.

Check your credit score

Once a year, an individual is entitled to a free credit score. However, if they have recently accumulated more debt, they should obtain a new one to determine if and by how much their credit score has changed. And if any discrepancies or errors are found, they should immediately bring them to the attention of the credit bureau so that the same can be corrected as soon as possible.

To put it briefly, one can use the aforementioned strategies and focus on gradually increasing their CIBIL score because even though credit score is not the only factor that determines the approval of an application, it is one of the main requirements for getting new credit.