A credit score is a numerical expression based on an analysis of a person’s credit history and usage pattern, which represents the creditworthiness of the person. For a score with a range between 300-850, a credit of 700 & above is considered good. Similarly, a score of 800 or above is considered to be an excellent score. But most scores today fall between 600 & 750.

Now the question arises, why the credit score is essential, and what’s the need to improve it? The credit score is an integral part of one’s financial picture. If this score is high, the risk seems to be less, but if you have a lower credit score, then the lenders would question your ability to pay what you owe.

Before improving credit score

There are two primary components of credit history:

CREDIT REPORT: This is a kind of credit report that includes all credit-related activities of a person. It is used by the potential lenders to get information about a person’s necessary information, his accounts & the payment history. CREDIT SCORE: Fair Isaac Corporation created this score, so in some countries, it is also known as the FICO score. It’s a single direct number representing your risk to lenders between 300 & 850. The lenders examine this score along with various other things before deciding to give you a loan. They will charge you for the loans accordingly. 

Checking your credit score is so easy that a person can do it in minutes and at any time. Just try and then say.

After checking the score, it’s the best time to take steps to improve it. The four tips having the most significant impact on increasing the credit score are:

Get out of debt fast, automate your credit card payments, keep your accounts open & put a recurring charge on themGet more debt, but only if you have no past debt to be paid off.

Let’s understand these steps in detail now.


Just wasting time transferring balances from one card to another instead of paying it off won’t help, especially when you consider that 30% of the credit score is calculated based on how much you owe. 

Step 1: Find the exact amount you owe- First of all, you must know how much debt you owe precisely.

Step 2: Decide what to pay off first- All debts are not equally treated. There may be several debts across different cards. So, the trick here that works is either pay the highest interest rate first or pay off the lowest balance first.

Step 3: Don’t be tempted- If you get rid of your debt, don’t just add to it continuously. Stop yourself from taking on more till the time you pay off your existing debt.

Step 4: Negotiate a lower interest rate- Using simple negotiation systems, one can lower the credit card’s APR & put that money back into the pocket 


35% of the score, which happens to be the highest proportion reflects the payment history, so even missing one payment can lead to your credit card to drop 100 points and more. By setting up an automatic payment, the need to worry about manually paying all the bills each month is eliminated.


Many times, it can be seen that when people think of doing something with their credit cards, they often close all the credit cards which they didn’t use in a long time. But this is the biggest mistake. 15% of the credit score reflects the length of credit history. Hence by wiping off the cards, you are erasing that history.

If you think you are not using the card, no problem but keep it open. Put a small recurring charge on it & automate it each month. This ensures that the card is active & history is maintained.


This system is only for people who are financially responsible. This means the people who have zero debt & pay their bills in full each month. It’s not for anyone else.

The biggest reason is that it involves getting or taking more credit to improve credit utilization.


Take out a bit of time from your precious time for improving your credit score using the four systems outlined above. This can help you to tap into more perks, take your rewards to the highest & the beat credit card companies. This is a Big Win in itself. 

Categories: Business


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