Maintaining Good Credit: 3 Tips
Your credit may be checked when you apply for a credit card, loan, or mortgage. That is one of the reasons maintaining good credit is important. Below are some practices that will help you maintain a good credit score:
- Check your credit report at least once a year: It is estimated that one out of four people have a serious error on their credit report. Errors can cause your credit score to decrease. Fortunately, you can get inaccurate information removed from your credit report. The sooner you report errors, the faster you will be able to get them removed. You should get your credit checked at least once a year.
- Pay bills on time: Consistently paying your bills on time is one of the key things you can do to maintain good credit. Missed payments can cause your credit score to drop. Your credit score may also drop if you frequently make payments late. Not only should you be making payments on time, but if you have a past due account on your credit report, then you should try to pay it off also.
- Keep credit card balances low: Credit cards can be a good thing if they are used wisely. However, far too many people get into the habit of using them for every purchase. Not only does this run up your credit card bill, but it can also lower your credit score. When lenders see a high balance on your credit card, they may assume you are attempting to live above your means. It is best to keep your credit card balance below 30 percent of the total limit. If you can keep your balance below 15 percent of the limit, then that is even better. Furthermore, you should try to pay off the balance each month if possible.
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