Do’s and Don’ts To Improve Your Credit Score

A credit score is necessary for borrowing loans or getting credit. It displays the financial status and repayment power of an individual. A better credit score can fetch good loan opportunities from the best institutions at the lowest possible interest rates in some cases. 

Generate your Credit Score

A lot of your transactions can have an impact on your credit score. From paying your credit card bill to paying installments for your loan, everything is kept in mind when banks generate your Credit Score. Here are some Do’s and Don’ts to follow for a good credit score:


Always try and pay your credit card bills and EMIs in advance:

Banks generally process a transaction within 2 to 3 days. If you pay your credit bills or your loan payments through bank transfers or cheque, always try and pay 2-3 days before the due date to prevent any delay in payment. Always pay your bills in full to avoid being a defaulter in payments. 

Maintain your Income to Debt Ratio:

Try to underutilize your credit and keep your income more than the credit facility available. This will impact your credit score positively.

Keep a track of your transactions:

Try to audit your expenses and look out for any unnecessary payments. Look out for expensive credit facilities that might hurt your pocket.


Do not keep a lot of credit facilities:

This might look like a luxury to own a lot of credit cards but eventually, it is not advised to do so as one might get carried away and use his/her cards recklessly. Avoid taking a lot of credit facilities if not required. Fewer facilities are cheap and easy to maintain.

Do not overuse your Credit Limit:

Try not to overdraft your account or fully utilize your credit limit. This impacts your credit score negatively and also puts a financial burden on your shoulders of paying large EMIs with heavy interest further degrading your score.

Do not pay only the minimum balance:

When paying your EMIs or credit card bills, try not to pay the only minimum amount due. This will de-escalate your credit score. Always pay your bills on or before the due date to avoid any delay in transactions. Pay your bills in full amount to avoid being on the default list. 

Bottom Line:

Since credit facilities are a necessity of daily life today, we have to be responsible enough to avail of these facilities without hurting our pockets. Always try to underutilize your credit limit. Do not get carried away with these facilities as we’ll have to pay them tomorrow anyways.


Additional Reading: What are the requirements for getting your first credit card?

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