A good CIBIL score of 750 (out of 900) is considered utterly necessary in this day and age when credit has become indispensable in our lives. In our daily lives we seldom come across people who are not using at least one or two credit cards or a servicing a loan at the very least. But did you know that in order to get a loan or a credit card approved it is mandatory to maintain a good CIBIL score? In fact you run the risk of your loan or credit card application getting rejected if your CIBIL score is not up to the mark. If you are wondering what is it that people do to maintain a perfect CIBIL score, here are some good habits that they necessarily maintain

They always make timely repayments:

The most important aspect of maintaining a good CIBIL score is to make timely repayments as it has the biggest bearing on your CIBIL score. Those with a perfect CIBIL score do not even miss a single payment on all the credit lines they service. Even a single late payment, your credit score can take a tumble. In order to keep up a good CIBIL score, it is thus advisable to automate your payments so that there is no scope of delaying or missing a single payment. Needless to say, you need to keep your account replenished ahead of the stipulated date.

Little or no outstanding balance on credit cards

One common habit of those who maintain a high CIBIL score is they have a little or no outstanding balance on their credit cards. Credit cards when used judiciously can help you build and maintain a good CIBIL score. On the other hand, if you are reckless with your credit card usage, it can turn into a debt trap that can have a detrimental impact on your CIBIL score. The golden rule of credit card usage is never spending anything on your credit card that you cannot afford to repay in full by the end of each billing cycle.

Low credit utilisation

Credit utilisation also plays an important role in determining the CIBIL score of an individual. Credit experts say that your credit utilisation or the total amount of credit you use as against the total credit amount made available to you, should be in the range of 30-40%. Anecdotal evidence however suggests that those with high CIBIL score do not let their credit utilisation exceed 20%.

They use credit only when necessary

With intense competition among lenders it is likely that you receive either direct mailers or phone calls from banks who are urging you to take a personal loan or a credit card. But do bear in mind that credit even when it is easily or readily available should only be used when it is absolutely necessary. In fact this is also another good habit of people with excellent CIBIL scores. They do not avail of credit unless and until they are truly in need of it, and even when they do they ensure that they have a healthy mix of credit and make timely repayments on the same.

They have a lengthy credit history

The age of credit also matters in keeping up with a good CIBIL score. Once again, there is anecdotal evidence that suggests that those with a high CIBIL score have an average account history of 10 years or more. Therefore even when you are using multiple credit cards and have applied for new credit cards do not close the previous credit card accounts. Repay the full outstanding amount on them and keep them locked away by all means, but do not close them as it brings down the total age of your account and increases your credit utilisation.

Thus as you can see, maintaining a good CIBIL score is no rocket science. It is all about maintaining financial discipline and good habits. Just like you exercise and eat well in order to maintain good physical health, you must do the requisite to maintain your financial health. 

(Contributed by Rajiv Raj, Director & Co-Founder at Creditvidya.com)