Credit scores aren’t a new concept. As a matter of fact, your credit score actually determines a lot of things for you and your future. Interest rates, home loans, car loans, approval or denials for larger purchases….most times if it involves anything over a certain dollar amount, your credit score will be verified and checked. And guess what? If your credit score isn’t “good”, you will be denied purchases of certain items. (or the interest rate you are approved for will be through the roof)
So, do you know how your credit score fairs to others in the world? Are you in line with the average credit score for the United States? Here is some basic information to keep in mind when it comes to take care of and maintaining a good to excellent credit score.
Tips To Keep Your Credit Score Improving Rather Than Declining
- Pay your bills on time
This is huge! Paying your bills on time has such an impact on your credit score that it can literally make or break it. If you receive a bill in the mail, pay it on or before your due date. Even waiting a day or two after the due date can trigger a negative reaction towards your score. Never wait on paying bills that you owe money for, ever.
- Keep your credit limit in control
Did you know that credit cards will keep upping your credit limit, even though you actually may not need that much spending power? Pay attention to the credit limits that you have in place for your current credit cards. If you feel that the credit line is too big, reduce it. Every bit of “possible” money goes towards your credit score as well. So, for example, if you have a credit card with a $10,000 credit limit on it, while it may sound nice to know that, banks and other people looking at you for loans see that as $10,000 worth of potential debt for you as well.
- Limit your credit card accounts if possible
This can be a bit tricky because it seems like every store and every company everywhere has some sort of credit card that they want you to opt in for. And while that extra percentage of savings that they are enticing you with might sound nice, every time you open up a new credit card, your credit score will be affected. (as in decrease) This doesn’t mean that you shouldn’t have credit cards, it just means that you need to be aware of the ones that you have and limit to having just a few if at all possible. The more lines of credit that are open under your name, the lower your credit score is going to be because of all that “potential” debt.
- Use your credit cards here and there and then pay them off in full every month
It may seem contradicting, but for the credit cards that you do have, it is important to use them every once in a while as well to show that you are good with your money and can pay off your balance with ease. About as clear as mud, right? Just keep this in mind. If you already have a couple of credit cards open that you’ve had for a while, using them every once in a while is good for your score. BUT, you need to make certain that you are paying off the balance in full each and every month! This shows that you are good with finances, plus it keeps away any of those pesky interest rate fees that are typically through the roof.
- Monitor your score closely
This is big. When’s the last time that you checked your credit score? If you can’t remember, it’s been way too long. There are a ton of ways that you can monitor your credit score. Some credit card companies and banks even offer that service for free. The reason that you need to monitor is because sometimes, mistakes happen and if something shows up on your report that isn’t true, you need to take the steps to start the process to correct and get your credit score blemish free. The longer something stays on your credit report, the harder it can be to remove it. If at all possible, checking your credit score monthly would be great. That way, you are on top of it if something does happen to pop up that isn’t 100% true.
These tips can and will help you start to grow or maintain a good credit score. While the highest credit score possible is 850, many people feel that anything above 750 is excellent and is a goal to strive for. The longer your credit history goes without having any type of negative reports or remarks, the higher your credit score will keep climbing! You hold the key to making your credit score through the roof!