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Looking for a loan or a credit card? In that case, it is essential for you to know about your credit score. Your credit score helps you define your credit value in front of a lender when you apply for a loan or a credit card. Credit value, also known as credit worthiness, is the measure of how eligible you are to get a credit card, and a good credit score makes it easy for you to get a credit card or a loan.

Now that we know what a credit score is, let’s dive into some of the ways in which you can maintain a good credit score at all times.

Don’t use your entire credit limit

When it comes to credit limits, it is always suggested not to use your entire limit. A 30% credit utilization rate is considered to be the best practice. An individual who uses 80% to 90% of their credit limit is considered a credit-hungry borrower, and lenders hesitate to approve their loan or credit card application.

Pay your credit card bills regularly

A good way to manage your finances and credit score is to pay your credit card bills on time. Timely payments not only help you to maintain your credit score, but they also establish you as a responsible borrower and make you worthy of getting a credit card or a loan.

Diversify your credit portfolio

Keeping a healthy balance of secured and unsecured loans in your portfolio is a significant move when you are looking to maintain a good credit score. A diversified portfolio denotes you as an individual who is capable of handling your finances properly. A lender will definitely consider a credit application made by a borrower who has a diversified credit portfolio.

Track your credit report regularly

Many times, we avoid this step. But keeping a close eye on your credit report is always a good idea. Doing so will make it easy for you to understand your credit behavior. You will also be given the opportunity to correct any errors. Your credit report is an in-depth picture of your credit history, and if you come across any problems, don’t hesitate to inform the credit bureau.

Enable credit card auto-pay

Setting up auto-pay is always a good idea when dealing with credit card payments. By doing so, you will never miss a payment date and avoid late payment charges.

Just link your credit card with your existing account and turn on the auto pay feature. Kotak 811 now offers a lifetime free credit card with their zero balance savings account, all you have to do is open the digital account and apply for the credit card online.

Avoid closing your credit account

Closing your credit account will lower your credit limit and impact your credit score. Closing an old credit account will impact your credit history. You should keep your credit account active if you have a good repayment history.

Final takeaway

If you are looking to maintain a good credit score, we suggest you follow all the above mentioned habits. Not only will you have a great credit score, but your next application to get a credit card or a loan will get easier. A cautious approach and a bit of patience will improve your overall financial health in the long run.

For more details visit: Kotak Bank