Having a good credit score is as good as having a healthy body and spirit. It helps you lead a credible social and economic life too. A good credit score is derived from your credit history. It helps you save a good amount of money, by helping you get good credit deals from lending agencies. It helps you acquire new credits at lower cost or lower interest as it may be called.
Just as any other goal in your life, like your career goals etc., credit goal plays the crucially important part. Higher your credit score, the better your chance is to acquire the good amount of credits are low interest and better terms of repayment. Lower the credit score you have, the higher the interest rates will be and the more complicated will the terms of repayment.
So, what is the best-desired credit rating and how to achieve it? These are the two points which arise in our minds as soon as we start understanding the importance of credit rating.
The ideal score can be anywhere between 300 and 900. Having a credit score of 800 is good enough to help you get the best credit deals in the market. The credit deal includes best interest rates which mean low rates as well as best terms of repayment.
How do you reach the elite credit rating of 800+?
- Make no excuses, repay on time. Timely payment is the major determinant of your credit score. 35% of your credit score is taken from your payment history. Give yourself no chances to deviate from this.
- Keep an eye on your credit card balances. The lesser you have due to pay, the better it is.
- Keep a check on the new credit cards you apply. New credit card application costs you 10% of the score. Too many new inquiries will affect your desired score.
- Be disciplined enough to keep your lifestyle in tune with your income. Have a realistic approach and align your credits and expenses to your income. Do not over spend.
- Have good credit diversity. Better the diversity of in your credit system, the preferred you are to the credit scoring model. A good mix of credit cards, home loan, auto loans and how you manage them builds your credit score.
- Have long and credible credit accounts. The longer your credit account is, the better your credit score. Stability of your credit accounts adds value and hikes your credit score.
- Ensure you reach your credit goal, repeating the above points on and on. This will help you get habituated to good repayment habits and being on the good credit record. Keep monitoring your credit progress regularly so as to ensure yourself being on track.
Fix yourself reasonable and attainable financial goals. Align your income, expense and existing credits. Plan your further credit requirement. This will help you achieve your dream credit score of 800+ faster than you think, and be credit elite.