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How Credit Card Users Can Maintain A Healthy Credit Score?

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Posted on
Jan 19, 2021
How Credit Card Users Can Maintain A Healthy Credit Score?

Credit card or plastic money is pre-approved funding to pay merchants for goods and services purchased. There are approximately 52 million credit card users in India alone, making it one of the most preferred modes of payment. The universal acceptance of credit cards and the convenience of use is another reason for soaring credit card users.  However, a credit card user needs to impress their lenders by showing their ability to repay the borrowed sum. Thus, maintaining a healthy credit score is a prima facie to keep the lenders happy. Here is how you can retain a good credit score. 

Check Credit Score

Financial institutions and banks rate a score between 740 to 799 as a healthy credit score. A good range of credit scores makes credit card users qualified for loan approval, better interest rate, and bonus offer. Credit bureaus with Reserve Bank of India (RBI) licenses are authorized to issue credit ratings. Investors check credit scores before offering credit. They make informed decisions after taking into consideration the credit scores of authorized credit bureaus. You can get your free annual Credit Information Bureau (India) Limited (CIBIL) online credit score report by sharing your details.

Credit Score: Payment of Full Outstanding Bill

If skipping bills is on your mind, it would be better if you give it a second thought. You should abreast yourself that such negligence can have a negative impact on your credit score. Even a small outstanding bill can lower your credit score considerably. People in business should brief themselves that the personal credit report reflects your business credit card. People who are liable to pay EMIs should ensure punctuality, as it holds the maximum weightage while issuing credit score. Credit agencies estimate your creditworthiness based on regularity and timely repayment of credit.

Regular Online Credit Score Review

Credit card users need to stay on guard and regularly check credit scores. Your credit score should remain stable throughout the year. Fluctuating credit scores can reflect your poor creditworthiness. Investors consider the latest credit score. You can estimate your financial soundness with an online credit score evaluator to give you an insight into your approximate credit card report. 

Low Credit Card Balance

Typically, the best credit balance rests at $0. A zero balance on your credit card indicates that you have paid off all your credit the same day you make the purchases. Though maintaining a zero-balance is an impractical methodology, the cardholders must maintain the credit card balance at the lowest minimum possible on or before the date of account statement closing date. Such a practice can improve your credit rating.

Long-term Continuance

A cardholder with long-term credit card continuance maintains their credit history and credit score intact. An excellent credit history acts in the favor of the credit card user. An impressive credit history report for a longer duration automatically comes under your credit score and maintains your image before the investors and lenders.

Conclusion

A healthy credit score is your passport to quick business loan approval and easy funding. Creditworthiness is a measurement of your credit card portfolio. Thus, credit card users should check credit score regularly whether offline or online credit score evaluator. An online credit score is a self-check mechanism to operate your finances sensibly.

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