Want to take your credit score beyond 700? Follow these 5 steps | Mint

If your credit score is low and want to improve it considerably, there are a number of steps that can be taken to fix this. At the outset, one must check the credit report regularly and get the errors fixed. Besides, there are some specific steps which one can take such as paying bills on time, keeping credit utilisation below 30 percent and maintaining a healthy credit mix.

5 actionable steps which one can take to take a credit score to 700 and beyond

1. Clear your bills on time: The payment history plays the biggest role in your credit score. It is, therefore, recommended to set up auto-debits for paying instalments and credit cards. Even when a single payment is missed, it can drag your score down by 50 to 100 points. So, one should maintain the minimum due but try to pay the full amount.

2. Credit utilisation below 30 per cent: CUR refers to the percentage of your credit limit that you are currently using. For instance, if your card limit is ₹1,00,000, then you should try to keep monthly usage under ₹30,000.

If you’re spending more, ask your bank to raise your credit limit or split usage across cards. Low utilisation shows you are not dependent on credit.

3. Maintain a healthy credit mix: A good balance between secured (home, auto) and unsecured (credit cards, personal loans) credit is recommended. Do not only rely on personal loans or credit cards. Having a secured loan (such as a gold loan or auto loan) in the mix raises your profile.

4. Keep old credit accounts open: The length of credit history matters — longer histories are viewed more positively. One should not close old credit cards unless necessary. Even if you’re not using an old card frequently, you should make a small transaction every few months and pay it off.

5. Check your credit report regularly: You are entitled to one free credit report every year from each bureau (like CRIF High Mark). You can look for errors or fraudulent activity (such as unknown loans). And then you can dispute incorrect information immediately with the bureau and lender.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.