Having a good credit score can open financial doors that you may not have had access to otherwise. A good credit score provides better financing options when shopping for a home or car, better interest rates on your credit cards, and better insurance rates. A good credit score isn’t a one-time deal though. Establishing a good credit rating for yourself is only the first step. A good credit score requires maintenance! Take care of your credit score and stay in good standing with our tips below.
Pay your bills on time
Paying your bills in a timely manner is key to maintaining a good credit rating. Keep a close eye on your monthly calendar or use an app to help keep you from being late on your bills. If you’re bad at paying your bills on time, it could be detrimental to your credit score. Late payments stay on your credit report for seven years!
Keep debt low
This has the biggest effect on your credit score. Do you have a brand new credit card with a high spending limit that you just can’t wait to max out with a huge shopping spree? Don’t do it! High credit card balances can affect your credit in a negative way. Keep your balances and debt low to improve your score.
Don’t open too many accounts
While it might be appealing to open a Target, TJ Maxx, Amazon, and every other store you know and love’s credit card, that’s not a wise decision for your credit score. Having too many open revolving accounts can lower your score. Stick to the credit cards that you need or just have one for emergencies.
Pay off your debts
The best way to improve your credit and ensure you’ll be paying on time? Pay off all your debts. Not only will this rid you of yet another monthly bill AND improve your score, but you’ll also end up paying less in interest fees by paying it off in a quicker manner. You might be enticed to just move your balance to a lower interest card by doing a “balance transfer.” However, a more effective way is to just pay it off if that’s possible.
Keep an eye out
Pay attention to your credit report, often. These days, we hear about identity theft and credit report errors all the time! Don’t be a victim. If you become a victim of identity fraud, paying attention to your credit report will allow you to resolve it quicker, and thus being less damaging to your credit score. If you ever see an error, dispute it and have it removed from your report as soon as possible.
Good credit is easily maintainable with our above mentioned tips. Having and keeping a bad credit score can affect your life in many negative ways and you will end up paying more for things that you wouldn’t be if you had a higher score. Maintain a good credit score to lessen your financial stress.