
Steer Clear of These 3 Things to Improve Your Credit Score

Even if you yearn to consume delectable dishes, can you do it if your stomach is upset? Definitely, not! In the same way, your credit score is that significant component of your financial health that determines if you can extend your finances through loans and mortgages.
But what is a credit score?

Blake Wisz/Unsplash | Ranging from 300 to 850, a credit score is a summary of one’s financial history, which plays a critical role in determining one’s creditworthiness
Ranging from 300 to 850, a credit score is a three-digit numeric summary of one’s financial history, which plays a critical role in determining the creditworthiness of an individual. A high credit score, therefore, not only clears the way for the approval of your loans at the lowest possible interest rates, but can even get you a job (if you’re that lucky!).
But if you’ve a significantly low score, how do you create and maintain a high one in the long run? No worries, here’s a quick rundown to help you strike the perfect chord.
#1 – A big NO to late payment, a bigger NO to accumulation of debts
Payment history is literally the deciding factor of the credit score, accounting for nearly 35% of it. So, to keep the money Gods in your favor, it’s of utmost importance to clear out your pending payments and avoid late payments at any cost. Some tips for that:
- Create a reminder of due-dates
- Automate bill payments from the bank account
- Pay the bills every fortnight, if that’s feasible. This would improve your score by lowering the credit utilization.
- Create a digital or paper record for keeping track of the bills
- Charge all of the bill payments to a credit card. This strategy would ensure that the balance is fully paid every month and would thereby avoid interest charges.

Lukas Blazek/Unsplash | It’s of utmost importance to clear out your pending payments and avoid late payment at any cost
#2 – Never max out your cards
The moment you get a new credit card is the moment you dress up all nice and set out on a shopping spree. You pat yourself for reaching this juncture as it’s the day you’ve long dreamt of – the day you would splurge without a shred of worry!
Keeping the drama aside, exhausting the maximum limit of your new credit card is one of the worst possible mistakes you could make. Not only would you overutilize your available credit, but also stress out your creditors because of the high debt-to-credit ratio. Therefore, it’s important that you acknowledge your affordability before spending lavishly.
#3 – Synthesize your debts
If you already have a colossal pile of debts, it would be highly advantageous on your part to take a debt consolidation loan from the bank and pay it off. This strategy ensures that you’re having just one payment to deal with. Plus, you might even get a lower interest rate on the loan.

Tim Gouw/Unsplash | If you already have a pile of debts, it would be beneficial to take a debt consolidation loan from the bank and pay it off
Another tactic to consolidate your debts is clearing them off with a balance transfer credit card. The perk? Some cards have an ongoing promotional period during which they charge 0% interest on your balances.
Wrapping it up
For the ambitious, you, who wishes to buy his dream home or car and go on foreign trips, maintaining a good credit score is of the greatest significance. Indeed it’s difficult, but aren’t all the good things in life difficult?
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