How to Increase Credit Score Philippines? (2024)

Here’s a comprehensive guide on how to increase your credit score in the Philippines, including essential factors and practical tips:

Understanding Your Credit Score

• What is it? Your credit score is a numerical representation of your creditworthiness. In the Philippines, scores range from 300 to 850, with higher scores indicating better credit health.
• Why is it important? Banks and lenders use your credit score to assess your risk as a borrower. A higher score unlocks better interest rates, lower fees, access to higher credit limits, and faster loan approvals.

How to Increase Your Credit Score

Here’s a breakdown of the key factors that contribute to your credit score in the Philippines and how to improve them:

1. Payment History (Most Important)

   • Pay bills on time: Late payments hurt your credit score significantly. Make sure to pay all your credit card bills, utility bills, and loan installments by their due dates.
   • Set Autopay: Automate payments to avoid accidental missed payments.
   • Pay more than the minimum: Paying just the minimum due on credit cards keeps your credit utilization high, which hurts your score. Aim to pay off your balance in full if possible, or at least more than the minimum.

2. Credit Utilization

   • Utilize less than 30% of your credit limit: Keep your credit usage below 30% of your available credit. For example, if your credit limit is 50,000 pesos, your balance should be below 15,000.
   • Request a higher credit limit: If you’re consistently maxing out your cards, consider asking your bank to increase your credit limit. This improves your credit utilization ratio.

3. Length of Credit History

   • Open your accounts early: Starting good credit habits early on will lengthen your history, reflecting positively on your score.
   • Don’t close old accounts: Closing old credit cards shortens your average account age, which could negatively impact your score.

4. New Credit

   • Limited new inquiries: Every time you apply for a new loan or credit card, a hard inquiry is placed on your credit report. Too many inquiries in a short period can hurt your score.
   • Apply strategically: Space out your applications for new credit.

5. Mix of Credit

   • Diverse accounts: A mix of credit cards and installment loans indicates you can manage different types of credit responsibly.

Additional Tips

• Check your credit report regularly: Get your credit report from the Credit Information Corporation (CIC) and review it for errors. Dispute any incorrect information that could be harming your score.
• Become an authorized user: If you have a family member or friend with excellent credit, ask if they can add you as an authorized user on their credit card account.
• Use secured credit cards (if needed): If you’re struggling to get a traditional credit card, a secured credit card can help you establish credit history.

Remember: Building a good credit score takes time and consistency. Implement these strategies and continue practicing responsible financial habits to see your score improve steadily.