How can Credit Card users maintain a healthy credit score
Many financial experts believe that Credit Cards help build credit history. If you are paying the card bill on time, without an outstanding balance, then you can maintain a healthy score. Read further to know how Credit Card users can build a good credit score.
Whether you want to pay your home rent, buy an expensive gadget or fund a medical emergency, a Credit Card is universally accepted. But do you know that it is also helpful in building your credit history? Your credit score gives your bank an insight into your loan repayment history and whether you are capable of handling the liability. From the time you start working, applying for a Credit Card can be the foremost step in helping you build a good rating.
- Pay the bills on time: If you have a habit of skipping Credit Card bills or delaying the repayment, then it will directly impact your rating. Even a small outstanding bill is considered to have a negative influence on your credit score. As a Credit Card user, you are liable to pay EMIs on time, as credit rating agencies evaluate your creditworthiness based on your punctuality of credit repayment
- Don’t close your previous cards: If you have more than one Credit Card that you do not use, then it is advisable that you do not close any of the earlier cards. Make sure that you use it responsibly for purchases and ensure timely payment of the bills; this will help you build a rich credit history
- Check your CIBIL Report: There are times when the credit report has some errors. A person can get access to his/her report and inform the rating agency that he/she has repaid and closed the loan. It is necessary for Credit Card users to check their CIBIL score, regularly. It will let them know about the errors and they can get them corrected at the earliest
- Track your credit utilisation ratio: When you are using a Credit Card, it is always advisable to monitor your credit utilisation ratio. The ratio measures your actual credit usage against your credit limit. The credit utilisation ratio shouldn’t exceed 30%. This will help improve your credit score. Spending more than 30% of your credit limit is risky, even if you are planning to pay off the bill when your monthly statement arrives
- Manage your debt: Your credit score is not just dependent on your Credit Card usage; it is also about your existing loan balance and other lines of credit image. If you have too much debt, then it will definitely affect your rating. If you are able to lower the debt, then you can easily maintain a good credit score.
A healthy credit score makes you eligible for any loan. Owning a Credit Card can be a good start to improving your rating to some extent; provided you are regular with making bill payments. Today, it is extremely easy to apply for a card online. ICICI Bank offers various types of Credit Cards to meet your specific requirements, be it lifestyle, travel, or others. With an ICICI Bank Credit Card, you can avail an extensive range of benefits and exciting offers on dining, shopping and much more!
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