Monsters were the primary source of worry in our childhood. However, these monsters have not disappeared in our adulthood as well. It is just that they have changed their appearance. One such monster that is capable of turning our adult lives topsy-turvy is bad credit score or report.

What is a bad credit score?

In the modern world, practically everyone is aware of the definition of credit score or report. When you have a history of defaulting payments of credit cards or loan installments, your credit score turns bad. In fact, many countries also include missing due dates for utility bill payments, breaking traffic rules, etc. include factors for degrading your credit scores.

While USA & Canada depend on the FICO credit score, UK has multiple institutions like Experian, TransUnion, Equifax, and others to provide the scores. The main impact of bad credit score is difficulty in getting loans or credit cards. Other issues include high rates of interest for loans or high fees for credit cards.

You can have a better understanding of credit scores at loans uk.

How do you maintain a perfect credit score?

The answer to this question is simple. We can have a perfect credit score by managing our finances well. Having well-balanced history earnings and spending is the key to get a great credit score. There are certain ways to manage your credit score such as:


  • Perceive credit elements


Understand the pivotal points that affect your credit history. Five important features make up the basis of credit history. They include:

History and type of your payments

Debt Levels

Age of credit

Credit Mix

Recent areas of credit


  • Bill Payments


The next obvious step is billing. As discussed earlier, paying due bills on time whether it is the utility ones or credit cards is very important.


  • Credit Balance


The balance in your combined credit cards should be low. The ideal balance is 30% of all your credit limits on combined cards.


  • Managing Old and New Credit Cards


Getting new credit cards frequently and closing older ones can also have an adverse effect on the ratings.


  • Loans


Loan installments and repayments also should be handled with care and responsibility in order to have a good credit rating.


  • Monitoring Credit Reports


Regular observation of your credit history makes less room for any potential errors that might have an ill effect on your credit report.


  • De-prioritization of debts


All the debts must be treated with equality and the repayments must be done on time with responsibility.


  • Return in full


Unless it is loan installment with a fixed term, it is always advised to have full repayment of bills to have a good score


  • Real contact, not virtual


It is always advised to have personal contact with your loan or credit card institution in order to avoid any unforeseen issues with your credit ratings.


  • Services


Plenty of services available would help to not only boost your rating but also monitor your spending so that you have a healthy credit score.