Skip to main content

How to Build good Credit Score with credit card


Using your credit card for regular spends and ensuring timely and full repayment of outstanding dues helps in building a good credit score.

Using a credit card is equivalent to taking a loan since it's the card issuer who pays for you and you repay the amount. Being a credit, credit card transactions are reported to credit bureaus who then use it to evaluate your credit score. Given that credit score reflects your credit worthiness and repayment behaviour, how you handle credit cards is what ultimately determines its impact on your credit score.

Using your credit card for regular spends and ensuring timely and full repayment of outstanding dues helps in building a good credit score. "Make sure your credit utilisation ratio doesn't exceed 30-40% of your credit limit regularly. Lenders usually hesitate to lend to borrowers who frequently breach this mark. You may also consider increasing the credit limit for lowering your credit utilisation

Here are 5 things you need to follow cautiously while making transactions through credit cards on monthly basis.

Pay your dues on time: Your repayments, be they credit card bills or loan EMIs, form the backbone of your credit score. So it is extremely important that you pay your outstanding balances on time every time. Every time you miss your payment, your credit score takes a hit. Every time you repay on time, your credit score goes up.

Pay your bills in full: As much as possible, pay your entire credit card dues every time before the due date. If you cannot pay the entire amount for whatever reasons, try to pay the maximum you can and not just the minimum amount. For one, the interest on the credit card is very high interest on the unpaid amount, thereby increasing your repayment burden. Second, it also gives an impression of being credit-hungry.

 Keep your credit utilization low: Credit bureaus look at how you are utilizing your credit. So, use only part of your credit limit.

Utilisation is usually considered ideal. For instance, if your credit limit is Rs 100000, use just Rs 20000-30000 a month on it. This would make you look like someone who uses credit in a responsible manner. This is where multiple cards help you by spreading your spending across cards. Your other lines of credit apart from credit cards also have a significant impact on credit score. Too much debt can mean substantially higher EMIs, which can make it difficult to keep up with monthly payments. These missed payments will lower credit score. The lower your debt, the easier it will be to maintain a good credit score.

Keep your credit inquiries low: Each time you apply for a credit product – a credit card or a loan – a query goes to the credit bureau and your credit score takes a small hit. So do not apply randomly for cards or loans. One should do their research properly, narrow down the most relevant offer with the highest potential for approval, and then apply for it. "Each new credit account also lowers your average credit age, and therefore your credit score. So refrain from opening new credit accounts one after the other

Check your credit report: Requesting your credit score directly from the credit bureau is considered as a soft query and does not affect your credit score. Checking your credit score regularly ensures that no discrepancies or errors are reported, and your credit score genuinely reflects your financial behaviour. The sooner you have a view into this, the sooner you can correct your course in case of any issues


SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now