Ways to Maintain a Good Credit Score


Your credit score is a number that summarizes the information in your credit record. It measures how well you have processed credit in the past and predicts how likely you are to handle it in the future. It indicates your creditworthiness or your ability to repay debt.

It is also called a credit rating.

Indian Credit Scores

In India, there are eight credit information companies licensed to operate by the Reserve Bank of India. These are:

  • Credit Information Bureau (India) Limited (CIBIL)
  • Equifax
  • Investment Information and Credit Rating Agency of India (ICRA) Limited
  • Credit Analysis and Research Limited (CARE)
  • Experian
  • India Rating and Research Private Limited
  • Brickwork Ratings India Private Limited
  • Highmark

Of these, the most popular credit score information company is CIBIL.

A CIBIL credit score is a three-digit number ranging from 300 to 900, with 900 being the highest and best score.


Factors That Affect Your Credit Score

The three main factors that determine your credit score include the following:

  • Your payment history
  • The amounts you owe
  • The period since your last missed payment 

Importance of a Credit Score

If your CIBIL rating is 750 or more, it is considered to be good. It is essential to have a good credit rating for several reasons, such as:

  • Better loan eligibility: If you want a loan or credit card from a bank or financial institution, it is a yardstick of your creditworthiness. This means that you have the means to repay the proposed loan and will not default on your payments. The higher your score, the better your chances of procuring a loan.
  • Extra benefits: With a high credit rating, you can get additional benefits such as better repayment terms, a shorter loan approval process, and low-interest rates.
  • Higher limits on your credit cards: You can also get a low rate of interest on your credit card and a higher loan amount.
  • A better chance of procuring a visa: A good credit rating gives you a better chance of getting a visa.
  • Asset for personal loans: A high credit rating can be a boon if you need a personal or home loan.

How to Maintain Your Credit Score

You can maintain a healthy credit score in various ways and thus strengthen your chances of procuring loans or better repayment terms. These are:

#1. Make Timely Payments

Always pay all your loans and credit card EMIs on time. If you delay these payments, it will hurt your CIBIL score. You can pay on time habitually by linking your payments to an auto-pay mode or setting up reminders.

#2. Don’t Exhaust Your Credit Card Limit

Be careful not to exhaust your credit card limit. Otherwise, your credit utilization will increase, which will only give you a poor credit rating. Ideally, your credit utilization should not exceed 30% of your total credit limit.

You can do this by not overusing your credit card, paying your EMIs by the end of each month, and keeping track of your expenses.

On the other hand, if you cannot bear your costs and need more credit, it would help to request that your bank or financial institution increase your credit limit.

#3. Check Your Credit Reports Periodically

It would help you a lot to check your credit reports from time to time. By doing this, you would be sure that there is no misinformation in the report, which could hurt your ratings. If there is, you can immediately bring it to the attention of the authorities and have it changed.

Also, if you need to update your personal information, like your address, the rating company can do this if you inform them.

#4. Take the Utmost Care When Closing a Credit Card

Also, before you close a credit card that you’ve had for several years, think before you do it. Such an action might affect your credit score. Lenders believe that if you have had a credit card for several years, it provides them with a history of your financial transactions.

In such a scenario, it’s better not to do away with your credit card. Instead, reduce the number of transactions you carry out on this card. This will help give you a better credit rating.

#5. Don’t Raise Your Credit Limit

If you’re in a position where you need an increase in credit, think very seriously about it, as this is an imprudent step. Immediately, it changes your debt-to-equity ratio, and the bank or lender applies interest to your new credit limit. This harms your credit score.

#6. Reduce the Number of Credit Cards You Possess

Please don’t go overboard with several credit cards because you satisfy their requirements. Each time you apply for a credit card, your credit score takes a hit, particularly at application time; the issuer obtains your credit score from a reliable rating agency.

Besides, since credit card debts are unsecured loans, it would not be prudent to have too many cards that could land you in massive debt.

#7. Don’t Ask for Credit from Several Rating Agencies Frequently

Avoid applying for multiple credits from several rating agencies, as this proves that you cannot manage your finances. Each time you submit a loan application, there will be a credit inquiry.

By applying for loans often, lending institutions understand that you cannot manage your finances well, which could lead to rejection. To avoid such a situation, ask for credit only when needed.


Numerous elements of your life significantly benefit from having a good credit score. It can aid job placement, lower interest rates, and loan approval. Thus, understanding how to keep a high credit score is crucial. Fortunately, you can take a few easy steps to ensure that your credit remains good. Using the advice in this article, you can maintain a strong credit score for several years.