Keeping your score high can help you save money by reducing interest. It can also help to get you the best rate when you need to borrow. Whether you're looking to purchase a car, home or any other big-ticket item, having a strong credit score can make it much easier to obtain financing.
How to keep good credit?
You can improve your credit rating by paying your bills on time, and maintaining low balances on revolving account. It's also important to know what your credit score is, so you can spot potential problems and resolve them before they cause issues in the future.
The first thing to do is review your credit report from all three of the nationwide consumer reporting agencies (Experian, Equifax and TransUnion). You can get a better idea of your score by checking your credit report. If you see something suspicious or believe that you have been the victim of identity fraud, contact a bureau immediately to correct any incorrect information.
To improve your credit rating, pay off your debts whenever you can. This is the easiest way to increase your credit score. Set up automatic payments, or set up alerts to remind yourself to pay your bills.
The credit utilization rate is an important component of your credit score. It reflects the amount of revolving debt you use. It's typically best to keep your credit utilization rate under 30% so lenders know you're only using the amount of credit that's necessary for your expenses.
Open fewer credit cards in a shorter period of time. This could make you appear riskier to lenders. Opening a lot of accounts can also lower your average account age, which can hurt your credit score.
Limit your use of revolving credits by keeping your credit limit high on all your credit cards and ensuring that you only ever use 30% of the total credit available. This will show the credit bureaus that you have a healthy mix of different types of revolving credit, which is key to improving your credit score.
Another important factor that affects your credit score is the combination of loan products you use. Credit scoring models take into account the ability of borrowers to responsibly manage a wide range of loan products, including credit cards, personal loans and mortgages.
Credit cards are a great way to improve your credit score. Just make sure you use them sparingly and responsibly. Charge a minimal amount each month to your card and pay all of the bills on time.
It is also possible to shift your outstanding debt by lowering your rate of credit utilization and paying off lower-interest debt before moving onto the higher-interest debt. This can raise your overall score, but it's a better strategy to focus on paying off debt and getting your balances down as soon as possible.