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Your credit score is a powerful determinant of your fiscal well-being. It influences not only your eligibility for loans and credit cards, but also the interest rates you'll be offered. The higher your score, the more money you'll save in the long run and the more likely you are to get your hands on better financial deals. To keep your stellar score, you need to take on habits that demonstrate to lenders that you're a good borrower.

1. Always pay your bills on time

On-time payments are the most critical aspect of having a high credit score. Even a few days' delay in payment can damage your score and remain on your credit report for up to seven years. Use reminders or auto-debit options to make sure you never miss a payment due date on your credit card bills, EMIs, or utility bills.

2. Keep your credit utilisation low

Your credit utilisation ratio is how much of your credit limit you use. Keep it below 30% for maximum effect on your score, experts say. If your monthly expenditures frequently exceed this amount, pay your bill more than once a month or ask for an increased credit limit to control your ratio.

3. Don't have multiple credit applications within a short time

Each time you get a loan or credit card application approved, there is a hard enquiry listed on your credit report. Having too many hard enquiries within a short period of time can mean credit-hungry behaviour and lower your score. Space out credit applications and see if you are likely to be approved with the use of soft enquiry utilities to prevent unnecessary hits.

4. Have a good mix of credit

Having a good combination of credit—like a balance of secured credit like a mortgage and unsecured credit like credit cards—can help your credit score. It indicates to lenders that you can manage various forms of credit properly. But taking unnecessary loans only to diversify your portfolio may prove counterproductive, so borrow only when you really need to.

5. Check your credit report frequently

Mistakes on your credit report, like your name or address being listed incorrectly or unfamiliar transactions, can impact your score without you even knowing it. Checking your report every now and then will help you identify errors and have them removed by the credit bureau. You are eligible to one free report every year from all of India's major bureaus: CIBIL, Experian, Equifax, and CRIF High Mark.

Having a good credit score is all about establishing good financial habits and being consistent in the long run. Paying bills on time, maintaining your credit utilisation, avoiding excessive new applications, and keeping up to date with regular credit report checks can not only help you maintain but also enhance your score—leading to better financial prospects in the future.

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