Having an impressive credit score is vital to be able to strengthen a loan with a handy interest rate. Someone with a high credit score can easily close a better deal in terms of low interest rates and a higher loan amount. On the other hand, it is unlikely that someone with a bad credit score will receive a loan for a large amount. And even if he gets the approval, it is probably a high interest rate.
There is a misconception that only those customers who fail to pay their payments have a bad credit score. There can be several reasons for a bad credit score. Here we mention some of the most important errors that credit card users must avoid to maintain a high credit score.
High credit score: 5 important errors to avoid
I. Minimal pay on credit card: There are some customers who tend to pay the minimum on their credit cards without realizing that this influences their credit score, while also paying a higher amount due to late costs and extra interest.
Ii. Lack of credit mix: Another mistake that some people make is only taking one category of credit instead of maintaining a healthy credit mix, such as credit card, personal loan and housing loan, etc.
III. Max from credit card: It is not recommended to maximize the credit card. When you issue all credit limit, you do this at the expense of your credit score.
Iv. Delay in the invoice payment of the credit card: You usually get around 45-day interest-free period, including the time delay between the calculation generation and the last date of invoice payment. But it is important to make the payment on the last date.
V. Warranty for defaulters: If you give a friend to a friend or someone you know and that person happens to be in default, this influences your credit score. That is why you must be on your guard to give any form of warranty for loans taken by others.
Disclaimer: Mint has a bond with fintechs for providing credit, you must share your information if you apply. These tires have no influence on our editorial content. This article only plans to teach and distribute consciousness over credit needs such as loans, credit cards and credit score. Mint does not promote or encourages taking credit if it comes with a series of risks such as high interest rates, hidden costs, etc. We advise investors to discuss with certified experts before we take credit.
