Yes, you have heard it right!
You can improve your credit score.
But how is it done?
First, one should understand what is Credit Score?
A credit score is the reflection of your credit health in a three-digit number. With the increase in the number of transactions, the credit score changes. The credit report considers the transactions that happened so far on a person’s account and reflects it in the score. Some transactions impact score positively while others impact it negatively.
So the score keeps on updating based on the transactions happening in the credit account. If you have a low score, do not worry at all. It is not the score for forever. With careful transactions, you can improve your score. If you have a good score, you need to maintain your record by doing transactions that impact score positively.
Here are some ways to maintain a good credit score-
- Pay your utility bills on time
- Monitor your credit score regularly
- Keep credit card utilization as low as possible
- Never close unutilized credit accounts
- Open credit account when needed
- Challenge the derogatory entries on the credit report with a credit repair specialist
Establish Credit Early
Start building your credit journey in the teenage
Why is it always suggested to maintain a good lengthy credit history?
The reason is- the duration of good credit history is also a major component of total credit score.
Now you must be wondering how to maintain a good credit score early in life while studying. At that time, being a student one cannot pay a credit card bill because of a lack of permanent earning source. So in such cases, parents or elder siblings can help in establishing a credit account successfully.
Here are few steps to establish a good credit account history in the early-
- Get the help of your parents in establishing a decent credit account in your teenage.
- Get yourself registered as a legitimate user of a credit card. But please ensure that your parents are making regular payments of the credit card. This will be helpful in some cases only. This shows to the lending agencies and credit bureaus that you can make timely payments.
- The smartest tactic to build a positive credit history is by putting utility bills on your name when you reside off-campus. Your regular payments to the utility bills can help you in improving credit scores. An important point to note is that only some credit bureaus consider these payments.