Swagatalakshmi Roychowdhury
Pay off debt on time
This is a non-negotiable if you want good credit score. Timely payments are the single most important factor in most credit scoring models, typically making up 35% of your FICO score.
Diversify the type of credit you have
Credit scoring models look not only at how well you pay your bills, but also at the variety of credit types you manage. This is referred to as your credit mix, and it typically accounts for approximately 10% of your score.
Limit new credit applications
Applying for fewer new credit accounts can help your score in several ways. Every time you apply for a new credit card or loan, a hard inquiry appears on your report. Too many of these in a short time can lower your score.
Make sure to dispute inaccurate information
Always point out if any information is not accurate on your credit report. Errors on your credit report can seriously damage your credit score, particularly if they involve major issues such as missed payments or a high credit card balance.
Become an authorised user
One way to help build or improve your credit score is to become an authorised user on someone else’s well-managed credit card account. It could be a parent, spouse or trusted friend. As an authorised user, the card’s payment history and credit utilization can be added to your credit report, which may strengthen your own credit profile.
Check credit score periodically
Checking your score periodically is a smart habit and does not hurt your credit when done through your own bank or a reputable credit bureau. It helps spot errors early and track progress.