High Credit Scores Don’t Happen On Accident
High credit scores do not happen by accident, they are cultivated over time. In order to get a good credit, you have to work towards it and then only you can achieve the desired results. This includes using appropriate financial strategies and credit moves. Through this, almost anyone can get high CIBIL scores as well as all the related perks.
When it comes to good credit scores, many people want to know what a high CIBIL score is. Let me tell you that a CIBIL score can fall anywhere, ranging from 300 to 850. And a score that is 720 or more is usually considered as a good one.
The higher your credit score is, the lesser risk you pose to banks, credit reporting agencies, lenders, and other financial institutions. Similarly, the lower your CIBIL score is, the more risky you are as a credit taking candidate. However, you can alter your credit score. But, to improve your score over time, you have to put in your blood sweat and tears.
It is a fact that most of the people who have good credit scores have some similar habits and behaviors, owing to which they have ultimately lifted their credit scores. Such people follow these practices consistently. So, let us have a look at the 6 things that people with high credit scores have in common.
1. They carefully pick credit cards.
People having excellent CIBIL scores generally pick the best card offers. For instance, they choose the cards with no annual fees, high benefits like cash-back miles and rewards, 0% introductory rates, etc.
Tip: Look for credit cards that best suit your needs.
2. They pay on time.
Your payment history is considered as one of the most crucial factors in determining your CIBIL score. In fact, it makes up 35 per cent of the credit score. This surely means that people with good credit pay all their credit bills on time each month. Such people stay on top of their credit bills, thus paying every single bill promptly.
Tip: In order to increase your CIBIL score, pay all your credit bills on time. And, if you forget the due date of your credit bills, you can circle the date in your calendar or set a reminder on your Smartphone.
3. They minimize available credit usage.
Credit usage, also known as credit utilization, is the ratio of your total credit limit and the amount you owe. This is one of the important things that is considered when determining your CIBIL score. People with good credit do not exhaust their credit limit. In, fact they usually keep their credit utilization low.
Tip: Make sure that you keep your credit utilization rate lower than 30 per cent of your entire open credit.
4. They seldom close or open accounts.
People having good CIBIL scores close or open their lines of credit occasionally and not too often. This is because they know that opening or closing accounts too often can quickly augment their credit utilization rate, thus putting a bad effect on their score. Although, opening some new accounts in a year would not damage your score much, closing and opening too many accounts can diminish your CIBIL score.
Tip: Do not open or close your account very frequently. Be selective and do it only when you can gain something.
5. They have a good combination of several credit types.
People having the best CIBIL scores have a mix of different credit types, which is very important to develop a good score. The different credit types include credit cards, installment loans, retail accounts, mortgages, revolving lines of credit, etc.
Tip: Diversify your credit types.
6. They have a balanced and lengthy credit history.
People carrying high CIBIL scores have a stable and long credit history. And, this did not happen overnight; they worked towards it for years. A positive credit history proves that you take your debts seriously and can pay your bills on time and in full.
Tip: Credit history accounts for 15 per cent of your total score, which means that you must seriously consider this factor. Be patient as your one mistake can spoil your credit building efforts.
If you too want to increase your credit score, follow these habits of people who have high CIBIL scores. With the right credit moves, you can eventually get in the same stead as them.