These days most of us avail loans to buy a house, set up a business, or buy a car. Many students take loans to further their education. How soon the loan is sanctioned, the rate of interest, and the amount sanctioned will all depend on your credit score which is based on your credit report. People with scores of 700 and more are the beneficiaries of lower interest rates and quick sanctions. Imagine if your score is greater than 700 and another person has a score of 698 then the person with score 698 will have to pay interest that is higher by one-half percentage point. And, this means over a year a person with a lower score will pay USD 19,000 and more as interest on a loan of say USD 165,000.

Your earnings, credit history, total current debt, payment history and the types of credit you have are all factors that go into determining your credit or FICO score.

You can take a few simple steps and ensure that your credit score is higher than 700.

Always keep your oldest credit account active and make sure you make all of your payments when they are scheduled to be paid.

Be sure to not let your accounts go over 30 days past due. You must make sure you pay at least the minimum due.

Do not have too many credit cards. Learn to say „NO,“ to offers of free credit cards. And, maintain a good credit limit. Avoid using all the available credit on the cards.

Monitor your credit report and address any errors or delinquencies immediately.

Plan your finance such that it is healthy. Consider debt consolidation.

Keep your oldest accounts open and avoid opening and closing new accounts.

Should issues arise, contact your creditors and try to arrange alternative terms. Ask them to waive late fees and penalties.

Missed payments or payments more than 30 days past due will crush your credit score. Make sure to send your payments on time.

Educate yourself about how credit works and how credit scores are calculated. Seek the assistance of a financial advisory or planner.

Even if advised, refrain from filing for bankruptcy. All you need to do is to sit down and curtail expenses, plan you income-expenditure, and avoid spending what you have not earned.

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