Your credit history is possibly one of the most important pieces of financial information you have to look after. After all, when purchasing a house or a car, or availing of a loan, it is something that banking officers look at first.

Instead of hoping for the best when the time comes for you to apply for a credit card or loan, there are some ways to actively improve your credit status. In the Philippines, there is still a prevalent thought that availing of credit leads to debt. However, a little knowledge can help you better understand the benefits of good credit, and how to properly take care of it in the long run.

Calculate the credit you can afford to take out.

Budgeting should be one of the first financial lessons most people learn. And it plays a big role in figuring out how much credit you can take on. To calculate the credit you can afford, you just have to look at your debt-to-income ratio.

Your debt-to-income ratio can be calculated by adding up all your earnings - your income, benefits, etc. Afterwards, add your fixed monthly expenses in another column. This includes your credit card bills, rough estimation of your utility bills, mortgages and insurance policies.

Lastly, divide your monthly expenses by your monthly income and multiply the quotient by 100. And ta-da! There's your debt-to-income ratio.

The lower the ratio, the better chances you have of being approved for credit!

Choose the right credit card.

Some people have multiple credit cards for different expenses; one for utility bills and another for airline tickets and travelling and so on. Whether or not this is your first time choosing a credit card, weigh the benefits of each card and ask these questions:

• Does it offer the best rate? Is there an annual fee?
• Does it meet my spending needs?
• Am I getting something back for spending on the card, such as cash back, rewards or miles?
• Is the card widely accepted?
• What features, services and security options are available?

Create a sturdy payment habit.

This boils down to two things:

1. Creating a regular payment schedule and,
2. Minimizing interest charges.

Creating a regular payment schedule essentially means paying your credit card bill on time. Your payment habits are monitored by credit bureaus and they could see whenever you skipped on paying your monthly bill. Although you may think that saving up and paying your balance in one go is smart, every month missed leaves a bad mark on your credit history.

It also increases your interest charges! So, it's best to pay on time - every time.

For more ways to maintain healthy credit and to help boost your financial well-being, check out our "10 Healthy Credit Tips".