If you’re ready to really make sure that you have good credit, then you’re going to have to understand that it’s more than just assuming that you’re always going to be able to just coast along. It’s not enough just to take the steps to making good credit — you’re going to need to maintain your good credit score for the long haul. Yet not every guide focuses on that. In fact, most guides only focus on how to actually get your credit score up, and then they fail to let you know that you’re going to have to do certain things in order to keep your credit score high.
One of the first things that you’re going to need to do is figure out how credit scores work anyway. Knowing what they’re made up of will help you make better decisions. The last thing that anyone wants is to find themselves being unable to actually improve their score merely because they don’t know what’s going on in the credit score world. A credit score is actually determined by several factors, including the timeliness of payment, the age of the accounts, the level of debt you carry, the utilization of that debt, and even the types of credit that you carry. Loans, installment accounts, credit cards and more should make up your credit score, but you don’t have to fret if it doesn’t work that way for you. One of the biggest things that you will need to pay attention to is your ability to actually pay things on time. Paying late is one of the best ways to mess up an otherwise good credit score. You can restore it by paying on time, but it will take months to undo even the smallest bit of damage.
You really want to make sure that you are paying all of your debts whether or not they actually show up on your credit report. You might think that the library can’t come after you for those outdated library books, but you might be surprised. Most libraries today will have enough information about you to attach their debt to your credit report. Don’t be caught up in that when it’s easier to just pay small fines before they become big large fines. You have to make sure that you don’t miss those billing deadlines at all. If it’s easier for you, you might want to get into the habit of actually paying early. This way you can always make sure that you’re in well before the due date. You can also save a little bit of interest by doing it this way as well.
Even though we mention it all the time, this point bears repeating — you don’t want to end up charging too much of your credit limit. That’s just a bad idea from all sides. The more you charge, the more you’re signaling to the credit card company that maybe you’re not as savvy with your credit as you should be. Traditionally speaking, when people have experienced a financial crisis of some kind, they start charging more. This behavior makes the credit card company worry that suddenly you’ve lost the ability to pay on your cards in a timely fashion, and they tend to either lower your limit or freeze your card outright.
Be cautious when it comes to new credit — you don’t want to get too many new credit applications in one go, because each inquiry is going to hurt your credit score. Far better to actually just use the credit you have, or try to get an increase by being a good customer and paying on time — more than the minimum amount, of course!
Overall, watching your credit is very important. Make sure that you subscribe to a credit monitoring service that can look through all three major credit bureaus for any errors on your credit report. Errors can cost you a lot of credit score points, so it’s important to really ensure that you have already checked this out. There is no point in working so hard to keep your credit report clean and then to find that you actually owe debts that you don’t.
The time is definitely right to make sure that you have great credit scores, but are you doing your part of the work or just coasting along? Get it in gear today!