Dos and Don’ts of Building and Maintaining a Good Credit Score

Your credit score is one of the most critical financial indicators that lenders use to assess your creditworthiness. Whether you’re applying for a loan, a credit card, or a mortgage, your credit score plays a huge role when it comes to determining the terms and conditions you receive. Building a good credit score is crucial for securing favorable financial opportunities. In this article, we will explore the dos and don’ts of managing your credit score, including tips on how to check your CIBIL score with your PAN card.

Dos for Building and Maintaining a Good Credit Score

  1. Pay Your Bills on Time

Timely payments of your credit card bills, loan EMIs, and other financial obligations are important for a good credit score. Set up reminders or auto-debits to ensure you never miss a payment.

  1. Maintain Low Balance on Your Credit Card

Maintain a low credit card balance in relation to your credit limit. A credit utilisation ratio of 30% or lower is advisable. This showcases responsible credit management.

  1. Diversify Your Credit

A mix of credit types, such as personal loans, credit cards, and mortgages, can have a positive impact on your credit score. It shows that you can manage various financial responsibilities.

  1. Monitor Your Credit Report Regularly

Periodically review your credit report to check for inaccuracies or discrepancies. You can use services that allow you to check your CIBIL score with your PAN card, ensuring accurate reporting.

  1. Pay Off Debts

Reducing outstanding debts, especially high-interest debts like credit card balances, can significantly improve your credit score.

  1. Keep Older Credit Accounts Open

The length of your credit history affects your credit score. Keeping older credit accounts open and active can be beneficial, as it demonstrates a longer and more established credit history.

  1. Address Errors Promptly

If you spot errors or discrepancies in your credit report, dispute and correct them as soon as possible to ensure accurate information is being used for your credit score calculation.

  1. Stay Within Your Credit Limit

Avoid maxing out your credit cards or exceeding your credit limits. Excessive credit card debt can harm your credit score.

  1. Build a Rainy Day Fund

Having an emergency fund can prevent you from falling behind on payments during unexpected financial challenges, which can damage your credit score.

Don’ts for Building and Maintaining a Good Credit Score

  1. Missing Payments

Missing even a single payment can negatively impact your credit score. Consistently paying bills on time is one of the most critical factors in maintaining good credit.

  1. Maxing Out Your Credit Cards

High credit card balances, especially if they’re close to your credit limit, can harm your credit score. Aim to maintain a credit utilisation low.

  1. Closing Old Credit Accounts

Closure of old credit accounts can reduce the length of your credit history and potentially impact your credit score. Keep these accounts open if they are in good standing.

  1. Applying for Multiple Loans or Credit Cards Simultaneously

Frequent credit inquiries within a short span of time could mean financial distress and lower your credit score. Apply for credit judiciously and only when necessary.

  1. Ignore Your Credit Report

Neglecting your credit report can lead to inaccuracies going unnoticed. Regularly monitor your credit report to ensure its accuracy.

  1. Default on Loans

Defaulting on loans can have severe consequences for your credit score. It’s crucial to work with your lenders to find a solution if you’re facing financial difficulties.

  1. Neglect Savings

A lack of savings can lead to financial instability and, in turn, financial mismanagement, which can impact your credit score.

  1. Ignore Your Credit Score

Your credit score is a vital financial tool. Ignoring it and failing to understand its importance can lead to financial problems.

Checking Your CIBIL Score with Your PAN Card

One of the most convenient ways to check your CIBIL score is by using your PAN (Permanent Account Number) card. The PAN card is a unique identifier that is linked to your financial and tax-related activities. To check your CIBIL score with your PAN card, follow these steps:

  1. Visit the CIBIL website or the website of any other credit bureau authorised to provide credit scores.
  2. Provide your PAN card number and other required personal information.
  3. Choose a subscription plan that suits your needs. Credit bureaus typically offer different plans for accessing your credit score.
  4. Make the payment as per the selected subscription plan.
  5. Once the payment is completed, you will have access to your CIBIL score and credit report.

By regularly checking your CIBIL score with your PAN card, you can stay informed about your creditworthiness and take proactive steps to manage and improve your credit score.


Building and maintaining a good credit score is a fundamental aspect of managing your financial health. Your credit score influences your ability to secure loans, credit cards, and favorable interest rates. By following the dos and don’ts of managing your credit score, you can develop a strong credit profile that opens doors to financial opportunities and ensures you are well-prepared to navigate the world of personal finance. Additionally, using your PAN card to check your CIBIL score provides a convenient way to monitor your creditworthiness and make informed financial decisions. Remember, a good credit score is an invaluable asset that can lead to better financial prospects and greater peace of mind.