Maintaining a good credit score is easier than pulling yourself out of poor credit. If you have a solid credit score, chances are you have done something right in the past. There is always room for improvement, however, and everyone can benefit from a higher credit score. There are a lot of misconceptions about how to acquire and maintain a great score, however.
The most obvious way to maintain a great credit score is to be on time with payments. Set payment reminders to make sure you never forget a payment. Simply paying off your debt consistently, even if it isn’t a lot at a time, can help your credit score.
If you miss a payment, get back on track as soon as possible. One missed payment won’t kill you, but your recent payments affect your credit score more heavily than older ones. If you follow up a missed payment by getting your money on in time a few months in a row, your credit score should improve.
Another way to improve your already good credit is increasing your debt to credit ratio. The amount of debt you have relative to how much credit you have is actually very important to your score, and there are three ways to improve this ratio. The first is obviously to rack up less debt. When possible, pay off as much of your debt as you can.
Another way to improve your debt to credit ratio is to open up a new credit account. If you already have good credit, you should have no trouble obtaining another line of credit. Even if you don’t plan to use this credit, it will improve your debt to credit ratio, causing your score to jump. If you don’t want to open up a new account, you can always try to increase the limit on your current cards. If you have a good history of payments with a credit card company, they will be likely to increase your credit limit. Again, you don’t need to use this credit, but simply having it can improve your score.
Be sure to maintain good credit by not applying for too much credit at once. If you apply for a multitude of credit cards or loans at once, you will have a lot of companies running your credit in a short period of time. When this happens, your credit score goes down. If possible, wait a few months between credit applications.
Yet another way to maintain good credit is to consolidate your debt. By consolidating your debt, you can create a single monthly payment as opposed to a bunch. Consolidating your debt can also often lead to less money owed, improving your debt to credit ratio while also improving your chances of paying off the money you owe.
Contrary to popular belief, it is okay to check your own credit. Some people mistakenly claim this lowers credit, but unless you do it a bunch of times in a very short time frame, your credit will remain the same. Checking your credit can give you an idea of where you are at and potentially how you can improve. You can also check your credit report for errors. Credit companies sometimes make mistakes on your credit report, and finding errors is one of the easiest ways to quickly improve your credit.
Lastly, don’t close old credit accounts. Even if you pay them off, you want to keep the line of credit open. This will give you a backup plan if things go wrong, and it will also improve your debt to credit ratio.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.