Your Credit Score Health: How to Check and Improve

Your credit score has a far-reaching impact on your financial life. It's the 3-digit number that can either be your ticket to favourable loan terms or a roadblock to your financial goals.

In simple terms, your credit score is like your resume – banks and other financial institutions use it to assess your creditworthiness before approving your financing applications.

Source: CTOS Credit

Maintaining a healthy credit score requires discipline and responsible financial management. Here are some essential steps to consider:

• Pay on Time: Timely payments on credit cards, loans, and bills are crucial. Late payments can significantly impact your credit score negatively.
  
  
• Credit Utilisation: Keep your credit card balances low relative to your credit limit. The general guideline is to use 30% or less of your available credit. High credit utilisation can signal financial stress and can potentially harm your score.
  
  
• Diversify Credit Types: Having a mix of credit types, such as credit cards, installment loans, and mortgages, can positively affect your credit score.
  
  
• Limit Requests for New Credit - Applying for multiple loans or credit cards within a brief timeframe can negatively impact your credit score. Lenders may interpret this as a sign that you're in urgent need of funds due to potential financial challenges, raising concerns about your creditworthiness.
  
  
• Monitor Your Credit Report: Track your progress by regularly checking your credit report for errors and discrepancies. Dispute any inaccuracies promptly.

In conclusion, understanding your credit score and taking steps to maintain a healthy one is vital for financial well-being. As the economic landscape evolves, being credit-savvy can make a substantial difference in achieving your financial goals.