​​Building credit history: Here’s how responsible credit card usage can improve your credit score

​​Building credit history: Here’s how responsible credit card usage can improve your credit score

Establishing a solid credit past record is an essential part of financial stability. One of the effective means to build or considerably improve your past credit record is via disciplined credit card usage. When you apply for a credit card, note that your usage and repayment behaviour are recorded and used to compute your credit score. In simpler terms, your credit card is not only a convenient financial instrument but also a strategic financial tool to improve your credibility. 

Here are ways on how disciplined credit card usage can improve your credit profile and score –  

Timely repayments: Before you hit on the credit card online or offline option to avail the card of your choice, ensure you understand that just using the card cannot fetch you a good history. To acquire an excellent credit record, timely and full repayments of the outstanding balance are a must. By doing this, you show financial discipline. Credit bureaus track these repayment patterns closely and on viewing your regular and timely repayments, may enhance your score.

Smart credit utilisation: This concept includes using your credit card in a responsible manner and not maxing out your available credit limit. Ideally, you must aim at utilising just up to 30 per cent of your credit card limit. For example, if your credit limit is Rs 1 lakh, your expenditures on your card must not surpass Rs 30,000. This low utilisation ratio demonstrates to the bureaus that you can effectively manage your credit.

Longevity of the credit card: The credit card account’s age plays a considerable role in improving your score. A longer credit record provides more data about your repayment behaviour and spending history. A healthy credit management over a considerable period of time can help boost your credit score.

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Periodic assessment of credit report: You must periodically assess your credit report for any discrepancies or errors. Mistakes in your credit report can have a negative impact on your score. If you figure out any errors, such as inaccurate mention of outstanding balance, transaction, date, etc., you must report this instantly to get it rectified.

Restricting credit enquiries: Every time you place an application for a loan or credit card, the lender makes a hard enquiry into your credit report. Multiple such hard enquiries in a short time period can lower your score as it indicates to the lender you are desperate for credit. Thus, it is recommended to place an application for new credit just when necessary.

Disciplined management of credit limit enhancements: If your credit card issuer offers to enhance your credit card limit, it does not mean you should increase your spending too. Instead, maintain or lower your spending to reduce your credit utilisation ratio. Doing so may have a positive impact on your score.


Maintaining a strong score of 750 and above is essential for your financial well-being. It not just assists you in obtaining approval on new loan or credit card applications but even can help you qualify for a lower rate of interest, processing charges and other better terms and conditions on loans. Note that a credit card is not only for spending – it is a powerful financial instrument to establish a strong credit record, which displays your credibility to lenders and credit card issuers. So, in case you don’t have a good credit score, apply for a credit card online or offline today to begin your journey towards building a better score.

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Shankar is a tech blogger who occasionally enjoys penning historical fiction. With over a thousand articles written on tech, business, finance, marketing, mobile, social media, cloud storage, software, and general topics, he has been creating material for the past eight years.