Good credit scores

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Good credit scores

What is a good credit score?

credit score is a numerical rating representing the perceived ability of a person or organization to fulfill their financial commitment. Good credit scores typically falls within the range of 300 to 850, depending on the scoring model used. The specific range may vary slightly between different credit bureaus and scoring systems which are in categories like poor, fair, good, very good and excellent. A higher credit score indicates a lower credit risk and can make it easier for you to obtain credit, such as loans or credit cards, at favorable terms get them at www.rg.co.ke

Steps taken to improve your credit score:

1. Pay bills on time

Payment history is a crucial factor in credit scoring. Make sure to pay all your bills, including credit card payments, loan instalments, and utilities, by the due date.

2. Reduce credit utilization

Keep your credit card balances low compared to your credit limits. High credit utilization, where you use a significant portion of your available credit, can negatively impact your credit score. Aim for a utilization rate below 30% on each credit card and overall.

3. Establish a diverse credit mix

Having a mix of different types of credit, such as credit cards, loans, and mortgages, can positively impact your credit score. However, don’t open unnecessary accounts or take on excessive debt just for the sake of diversifying your credit.

4. Maintain a long credit history

The length of your credit history can influence your credit score. If you have old credit accounts in good standing, try to keep them open, even if you’re not actively using them.

5. Minimize new credit applications

Applying for multiple new credit accounts within a short period can be viewed as a red flag and may lower your credit score. Only apply for new credit when necessary.

6. Regularly check your credit reports

Obtain free copies of your credit reports from the major credit bureaus (Credit info Kenya, Metropol CRB, and TransUnion) as per www.newsroom.transunionafrica.com  and review them for errors or fraudulent activity. Dispute any inaccuracies you find to ensure your credit information is correct.

7. Avoid collections and negligence

Paying off or resolving any outstanding debts or collections can help improve your credit score over time. Additionally, avoid late payments and delinquencies as they can have a negative impact on your creditworthiness.

8. Be patient and responsible

Improving your credit score takes time. Focus on maintaining good credit habits, and over time, you should see positive changes in your score.  

Remember, improving your credit score takes time and responsible financial habits. It’s essential to be patient and consistent with your efforts to see positive changes in your creditworthiness in order to have good credit scores.

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