How to Build and Maintain a Strong Credit History
Published on : May 23, 2023

Achieving financial success and stability requires maintaining and building an outstanding credit history. Your credit history reflects your financial behaviour, including your ability to make timely payments, manage debts, and use credit responsibly. A strong credit history can help you secure loans, credit cards, and other financial products with better terms and lower interest rates. In contrast, poor credit history can make it difficult to access credit and may result in higher interest rates and fees. Here we’ll discuss some practical tips and strategies for building and maintaining a strong credit history to achieve your financial goals and secure a better future.

What is Credit history?

Your borrowing and repaying activities are documented in your credit history, which helps creditors determine your trustworthiness. It includes details of all your credit accounts, such as loans, credit cards, and mortgages, as well as your repayment history, outstanding balances, and credit limits. Your credit score for a personal loan, which serves as a numerical indicator of your creditworthiness, is determined using information from your credit history.

Tips to Maintain Strong Credit History

Building and maintaining a strong credit history is important for financial stability and achieving your long-term financial goals.

Here are some of the methods to help you build and maintain a strong credit history.

  • Avoid Late Payments: 

Late payments can significantly damage your credit score. Make sure that you make all your credit payments on time to avoid any negative impact on your credit history.

  • Review your CIBIL Reports Regularly: 

Make sure the data on your credit reports is correct and updated by checking them frequently. This will also help you identify any fraudulent activity on your account.

  • Maintain Credit Utilisation Ratio: 

Maintaining a low credit utilisation ratio is important. A high credit utilisation ratio can negatively impact your credit score. Make sure to keep your credit utilisation below 30% of your total credit limit.

  • Manage Credit Mix: 

Various credit products, including credit cards, loans, and mortgages, can help your credit score. Make sure you manage your credit mix well.

  • Avoid Multiple or Frequent Enquiries: 

Your credit score might be negatively impacted by multiple or frequent credit requests. Apply for a personal loan only if you actually need it.

  • Do Not Exhaust Credit Limit: 

Avoid exhausting your credit limit. This can also negatively impact your credit score. But if the costs exceed the available credit limit, one could request the lender to raise the credit limit.

  • Do not close old accounts: 

Closing old accounts can lower the average age of your credit accounts, which can negatively impact your credit score. Try to keep your old accounts open and active.

  • Monitor your co-signed loans:

It’s important to monitor any debt for which you have co-signed. Sometimes the borrower is unable to repay the loan amount because of unanticipated financial emergencies. Missed or late payments affect several things, including your credit score.  It is therefore advised that you keep track of any loans for which you have already co-signed.
Avail at least one credit product: Getting a pre-approved loan under their own name might be challenging for people who have no credit history. Even if they are approved for a loan, the interest rates will still be greater than those provided to those with credit histories. In order to maintain your credit history and raise your credit score to 750 and further close to 900, it may be a good idea to obtain at least one credit line, such as a credit card.


Building and maintaining a strong credit history requires a combination of responsible credit management and financial discipline. By following the tips above, you can establish and maintain a good credit score over time. Remember to pay your bills on time, monitor your credit reports, manage your credit utilisation, and be cautious about applying for credit. With a strong credit history, you can access better credit terms, lower interest rates, and ultimately, achieve your financial goals.