A credit score is a three-digit number that helps in determining your credibility. Every credit card issuer or a lender does a credit check before approving your credit. A credit agency is one that keeps a record of your credit score. Not having a credit or poor credit score can easily affect your application.

First-time credit card users need to understand how important it is to build and maintain a good credit score. In this article, we have covered the dos and don’ts that can help you improve your credit score. Keep reading to kick start your research.

Do’s to improve the credit score

Here are a few things that you need to keep in mind while using a credit card so that you can avoid harming your credit score.

  • Pay your credit card dues on time: This one is the most important one, always keep your credit card dues clear on time and in full. If you forget the due dates then do yourself a favor and register for the auto-debit services so that you never miss a due date. This will help you in improving your credit score.
  • The low credit utilization ratio: You should never use your credit card beyond the given credit limit. It is advisable to maintain a credit utilization ratio between 30% – 40%. If you go crazy when using a credit card then you should set a threshold limit on it. On reaching the limit you will be notified through a text message on your registered mobile number. A low credit utilization ratio helps you in building a good credit score.
  • Check your credit report: Checking your credit report regularly helps you know where you stand and how much you have to work on your credit score. If you have a poor credit score then it will give you an idea of how much work you will need to put in to improve it.
  • Report stolen or lost credit card: As soon as you become aware of your lost card report it immediately. Reporting it will help you in avoiding credit card fraud. This will also help you in protecting your credit score from getting affected.

Don’ts to improve the credit score

Hereunder are some of the things that you must avoid doing at all costs in order to improve and maintain a good credit score.

  • Applying for multiple credit cards: Never ever send multiple applications at the same time as it will only lead to hard inquiries against you. And this will directly impact your credit score negatively.
  • Paying just the minimum due amount: One of the biggest mistakes that one can do while using a credit card is just paying the minimum due amount and not the entire amount in one go. This will affect your credit score negatively and you must avoid doing it frequently.
  • Closing old accounts: After getting a new credit card you will be tempted to close the old accounts because you won’t use them. But doing so will only going to affect your credit score. Closing old accounts will result in losing all the credit history. Instead, you can use your old credit cards for small purchases and it will also help you in building a good credit score.

Additional Reading – Best Way To Pay Off Credit Card Debt

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