1. Check Your Credit Report
To identify the root cause of a low credit score, download your latest credit report from a recognized credit bureau.
If you find any errors, raise a dispute with the credit bureau. Correcting inaccuracies can help improve your credit score over time. Moreover, track your credit report regularly to identify such discrepancies.
2. Pay Off Outstanding Dues
Outstanding balances can significantly reduce your credit score, even if the amount is small.
To improve your credit score:
Regular and timely payments help build a strong repayment history and positively impact your score.
3. Reduce Your Credit Utilization Ratio
Credit Utilization Ratio (CUR) is the percentage of your total credit limit that you are using. A high CUR indicates greater dependence on credit cards and can negatively affect your credit score.
To keep your CUR low:
4. Avoid New Credit Applications
5. Maintain Healthy Payment Habits
Payment history is one of the most important factors affecting your credit score.
6. Don’t Close Your Old Credit Accounts
A longer credit history improves your credit score as it reflects stable and responsible credit usage over time. Closing old accounts can shorten your credit history and may lower your score. Therefore, it is better to keep older accounts open, especially if they have minimal or no annual fees.
