How To Maintain Strong Credit Score: From Managing Old Accounts To Low Utilisation — Key Expert-Backed Tips

Maintaining a strong credit score has become one of the most essential factors for borrowers in India to secure access to affordable loans and credit facilities. A score above 750 is often considered excellent, making it easier for individuals to obtain approvals for personal loans, credit cards, home loans, or vehicle finance. According to experts, a high score does not happen overnight but is the result of consistent financial discipline , timely repayment , and prudent borrowing habits sustained over the long term.

Why Timely Repayments Matter Most

One of the most important contributors to a healthy credit profile is repayment history. Lenders rely heavily on past repayment patterns to assess whether an applicant is a reliable borrower. Any delays or missed instalments, whether on credit cards or loans, can negatively impact the score. Setting up automatic debits or reminders ensures that payments are made on or before the due date. Financial advisors emphasise that developing the habit of punctual payments is among the most effective ways to safeguard a strong score over time.

Keeping Credit Utilisation In Check

Another crucial factor influencing credit health is the credit utilisation ratio, which indicates how much of the available credit limit is being used. Experts recommend keeping utilisation below 30 per cent of the sanctioned limit, as this reflects responsible usage and reduces dependence on debt for everyday expenses. For instance, if an individual has a credit card with a limit of ₹2,00,000, ensuring spending remains under ₹60,000 demonstrates financial prudence. Higher reliance on credit not only raises repayment risk but also signals over-dependence to potential lenders.

Importance Of Diversifying Credit Types

A balanced mix of secured and unsecured credit lines is also seen positively by lenders. While secured loans such as home loans or vehicle loans display long-term financial commitment, unsecured credit like credit cards shows the ability to handle short-term borrowing. Experts caution, however, against applying for multiple loans or cards within a short span of time, as frequent hard enquiries can bring down scores and raise red flags for lenders. A measured approach, spacing out applications while responsibly managing existing credit, is considered far more sustainable.

Retaining Older Credit Accounts

Length of credit history plays a surprisingly significant role in determining an individual’s overall score. Accounts with longer repayment records build trust with lenders, who view them as a sign of consistency and reliability. Closing older accounts, even if they are not actively used, can shorten this credit history and negatively impact the score. According to financial advisors, borrowers should aim to retain old credit cards or loans that have been managed responsibly for years, as they strengthen creditworthiness in the long run.

Monitoring Reports Regularly

Regular monitoring of credit reports is strongly recommended to ensure accuracy and early detection of discrepancies. Mistakes in credit bureau records, if left unchecked, could harm an applicant’s borrowing prospects. By reviewing reports consistently, consumers can not only track their progress but also raise timely disputes for any errors. In the digital age, where most credit bureaus allow easy online access, keeping an eye on these reports is both practical and beneficial.

Understanding The Credit Score Range

Credit scores in India generally fall within the range of 300 to 900, with anything above 750 considered excellent. Scores between 700 and 749 are categorised as good, while those in the range of 650 to 699 indicate moderate credibility. Borrowers with scores below 600 often struggle to secure approvals or face higher interest rates. Experts highlight that sustained efforts in repayment discipline, low utilisation, and balanced credit portfolios are key to moving towards the higher end of the scale.

Key Takeaways For Borrowers

To summarise, financial specialists underline five crucial habits to maintain an excellent credit profile: make timely repayments, keep credit utilisation below 30 per cent, maintain a healthy mix of secured and unsecured credit, avoid multiple simultaneous applications, and retain old accounts wherever possible. Consistently applying these principles, alongside regular monitoring of credit reports, ensures borrowers remain financially resilient and ready to access loans at favourable terms.

Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Readers are encouraged to consult certified financial advisors or credit experts before making decisions related to credit management.