Each of us has a unique credit journey that ranges from bad to good credit choices. There is always room for improvement whether you already have a good credit score or wish to build it from scratch. However, there are certain good habits that will help a lot in the long run. Below are the 5 tips that you will find extremely helpful in boosting your credit health.

Paying the Bills on Time: Lenders would definitely look at how soon you pay back. Thus, paying your bills on a regular basis proves it to them that you are indeed reliable. It is crucial to not only pay your debts on time but also pay the phone bills, utilities and rents in a timely manner. Failing to do so can have a negative impact on your credit score. Setting up automatic payments can help if you easily forget to make payment on time.

Paying the Debts: Lenders would definitely check if you can pay back what you have borrowed. Make it a habit to pay the credit card bills on a regular basis. If you are currently struggling to pay the debt, you can always transfer it to a single credit card. How you handle the debts now will show how well you can pay the future debts. Consistency is key!

Diversifying the Credit Mix: It is not obligatory to have multiple credits, but lenders are usually paying attention to the credit mix. For instance, you might have a student loan along with an auto loan and now you wish to apply for housing finance. The variety of debts and how you handle them each will also show how well you handle money. However, you should avail a loan only if it is absolutely necessary.

Not Having Too Many Credit Cards: It is not a good idea to open a lot of credit cards within a short time. Each time you apply for a credit card, it generates a hard inquiry that has a negative impact on your credit score. Applying for several credit cards at one go signals that you are struggling with money. This is certainly not a good idea if you are applying for a loan shortly as your reports would be thoroughly checked. Ensure that you keep a considerable time interval while applying for a new credit card.

Not Closing Old Credit Cards: While you might be tempted to close the unused credit cards, you should think again before you do it. Your overall credit history includes credit cards also. If you close the old credit cards, this will shorten the credit history period. As a result, it lowers your total available credit. Moreover, it also increases the utilization ratio. This is why you should let the old credit card accounts stay open. Closing all the old credit accounts will also increase your credit utilization ratio.

Thus, with the above-mentioned financial habits, you are sure to boost the health of your credit. Applying these tips consistently will help you maintain credit health.