Boosting Credit Score: Paying bills on time isn't the only way to boost your credit score; keep these things in mind as well; learn the tricks.
Boosting Credit Score: More Than Just Paying Bills on Time — Smart Hacks You Must Know
Maintaining a good credit score is crucial for financial stability, loan approvals, and favorable interest rates. While most people believe that paying bills on time is the only requirement, experts emphasize that building and sustaining a high credit score requires much more. From handling credit card payments wisely to managing credit utilization, there are several smart strategies that can help you achieve and maintain a strong credit score.
Timely Payments: The Foundation of a Good Credit Score
Paying bills on time remains the most important factor in credit score management. Even a single-day delay in paying credit card bills or loan EMIs can negatively impact your score. Therefore, make sure all payments are cleared before the due date to avoid late fees and ensure your score stays healthy.
Always Pay the Full Amount, Not Just the Minimum Due
A common misconception among credit card users is that paying the minimum due amount is enough to keep accounts in good standing. While this prevents penalties, it does not reflect well on your credit profile. If your goal is to maintain a high credit score, always make the full payment of your credit card bill. Carrying forward partial dues not only increases interest charges but also signals weak repayment discipline to lenders.
Avoid Settlements at a Discount
When credit card bills pile up, some users opt for settlement offers where they pay a reduced amount to close the outstanding dues. For example, if your credit card bill is ₹2 lakh, settling it for ₹1.8 lakh might seem tempting. However, such settlements are recorded by credit bureaus and can significantly damage your credit score. For long-term financial health, it is better to repay the full amount rather than choosing discounted settlements.
Keep Credit Utilization Low
Many people assume that maxing out their credit card limit occasionally won’t hurt. But experts advise otherwise. Excessive usage of available credit limits increases your credit utilization ratio, which is a key factor in determining your score.
Ideally, your credit utilization should not exceed 30% of your total available limit. For instance, if your average spending requirement is ₹2 lakh, it is better to have a credit limit of at least ₹5 lakh. Maintaining a higher limit with moderate usage signals financial discipline and improves your score.
Don’t Cancel Old Credit Cards
If you own an old credit card that you no longer use, it might seem reasonable to close it. However, cancelling old cards can reduce your total available credit limit, which in turn raises your utilization ratio and can lower your score. Keeping old cards active — even with minimal or occasional usage — helps you maintain a higher overall limit and strengthens your credit profile.
Smart Hacks to Strengthen Your Credit Score
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Set reminders or automate payments to ensure you never miss a due date.
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Keep balances low on all cards instead of concentrating spending on one card.
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Check your credit report regularly for errors and report discrepancies immediately.
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Avoid frequent loan applications, as multiple inquiries can negatively impact your score.
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Diversify your credit mix, including both secured (like home loans) and unsecured (like credit cards) credit, to show healthy credit management.
Final Word
Building a strong credit score is not just about paying bills on time — it requires careful planning and consistent discipline. By avoiding partial payments, keeping utilization low, and maintaining older accounts, you can steadily increase your score. In the long run, these small but impactful practices will help you secure loans easily, negotiate lower interest rates, and enjoy greater financial flexibility.
A good credit score is more than just a number — it’s the key to your financial credibility.
