TIPS: Want Credit? Understand Your Credit Score

Generally, people are not aware that they have a credit score, but in fact if you have a personal account at one of the banks, or have ever filed any type of application – personal loans, credit cards and the like. Thus, you will currently have one running. The definition of a credit score itself is a value given to each debtor or individual, that is used by lenders in determining your ability and responsibility to make your payments regularly.


Low credit ratings mean high risk to the lender, so the interest rate of loans offered would be higher to cover the risk of the lender, if you fail to make payments or can not pay off the loans. Or your application will be rejected. But if you have a high credit score, when you want credit it can be obtained easily. The score ranges between 300 – 850 value above 720 indicates a safe zone, while a value below 640 will make you high risk.


Here are some tips to improve your credit score:

  • Be punctual in paying each bill

Every bill that is not paid or delayed, will be recorded by the creditors. For example if you are late making a payment of credit card bills, and the company reported the case to the bank. Then this will lead to a decrease in your credit score. If later on you apple for a mortgage, the bank would see a credit score is and make a decision in determining the interest rate and so forth. In essence, do the payment on time, because all forms of records of your transactions will be analysed, especially any new transactions.

  • Reduce Debt

In addition to paying bills on time, you should reduce the debt, for example, for those who have more than one credit card, you can consider moving the outstanding balance to a credit card with a lower interest rate, using the system transfer balance.

  • Have assets and fixed income

If your income is recorded on a bank account, plus any ownership of assets like a house, shop, or other buildings, these will also improve your credit score.


Do the things mentioned above, along with regular examination of your financial statements in order to keep your credit score high. All this aims to help you, if in the future want to get credit.