Credit not as good as it should be? Here's how to avoid common pitfalls in CIBIL score

A good credit score can help you with lower interest rates on your credit cards and loans, besides easy approvals of both, lower insurance premiums and extended credit limits for your mobile connections.

Here are some tips to help you maintain a good credit score. (Image: AFP)

Credit Score: A good credit score can help you with lower interest rates on your credit cards and loans, besides easy approvals of both, lower insurance premiums and extended credit limits for your mobile connections. Your credit score plays an important role as best privileges come with the finest credit scores. For the uninitiated, your Credit Score is a three digit number in the range of 300-900. It is derived from the information in your credit report collected by credit bureaus like CIBIL, based on your credit card balances and payment summary, as well as your loan payment history. Aiming to get a great credit score is no easy feat, many strain to come close for a score as high as 750 or 800+, which puts one in the privileged spot. If you find yourself nowhere near that range, here are some tips to help you maintain a good credit score: Understand How it Works? If you want to work out a great credit score, then you should know how it operates on a daily basis. Your payment history, credit age, recent credit, debt outflows (EMIs) from your monthly income some aspects which are used in obtaining your credit score. Timely Payments! Make sure to pay always on time if you want to generate a decent credit score. Always keep yourself ahead with your payments, try to mark dates, or put an automatic reminder to help yourself with on-time payments for your credit card, loan EMIs, mobile rentals, and even other utility bill payments etc. Be careful with your Credit: Your credit score will be not great, if your credit card balance in relation to your credit limit is high. You must pay enough to keep your balances to less than 30% on your credit card. Also, utilize your credit card only till as much as you can pay that month, in the first place. Multiple Credit Cards/Loans: Having multiple credit cards and loans can damage your credit score. It’s better to stick to one or maximum two credit cards and pay them well on time to increase your credit limit. Same goes for applying for loans, applying for loans frequently also puts you in bad spot and each time a money lender does a credit check, it negatively impacts your credit score. Watch out for your Credit Report: Lastly, even if you are doing everything right doesn’t mean it can’t affect your credit score. Some identity thefts and credit frauds can lead to disastrous inaccuracies on your credit report. Which can also be a great problem for your credit score. Try to check your credit report once in a while, and report any blunders if detected, so you won’t have to jeopardize your credit score.