5 Tips to Maintain Your Good Credit Score

If there’s a fashion police that lets you know if you belong to either the best or worst dressed list, in the world of finance, there are credit bureaus determining whether you deserve the trust of creditors or not. Credit scores let you know how credit bureaus think of you, and fortunately or unfortunately, credit scores are fairly accurate, unbiased, and reliable results of how you’ve managed your credit.

When it comes to maintaining your 620 and above credit score, all you have to do remember is that good deeds are equal to good credit scores and vice versa.

1. Be a Good Payer
Credit scores are affected by five primary factors, and the most important factor of all is an individual’s payment history. Basically, it judges how good a payer you are. Do you pay on time? Do you always pay the minimum amount you owe to your credit card company, or do you pay more than that to further reduce your debt?

If you want to maintain your good credit score, you should focus mostly on this aspect. The first thing to do is to know the various deadlines you have to meet. Mark them on the calendar if necessary. It’s nice if you can pay a few days prior to your deadline, but it really doesn’t matter if you pay on the exact due date because that’s still considered punctual in your part. Secondly, know how much you owe so you can budget your money accordingly. As much as possible, pay off everything you owe each month. Failing that, pay at least more than the interest you owe.

2. Eliminate Debts Properly
A bit less important but still considerably more significant than other factors is the total amount of money you owe to your creditors. And of course, the only way to get things right in this situation is to pay off your debts.

A steady stream of payments is generally considered more favorable by creditors because it implies a commitment in your part to pay what you owe immediately and consistently. On the other hand, creditors will fail to appreciate your preference for paying large amounts of money in between large gaps of time. Things are going to be even worse if they’re able to track the source of your payment, and find out that you applied for a new loan just to pay off your old or existing debts.

3. How Long Have They Trusted You?
Most individuals tend to obtain approval for their credit card or loan application when they’ve already worked a number of years and are earning a certain amount of money. Earlier than usual approval from creditors speak well of you because it means that you’ve been able to maintain your good credit score far longer than others. It also means that you’ve the required discipline and key financial skills to manage your credit successfully.

4. The Fruit Basket of Credits
How many types of credit accounts do you have right now? Do you owe money on your home, your car, and any other asset you have? How many credit cards do you have? Credit bureaus also compute your credit score according to how you’ve been using your credit. They will check your balances and see how much of your credit you’ve used. They want to know where and how you’ve been spending your money and whether or not you truly can afford how you’ve been managing your income and expenses.

5. When’s the Last Time You Applied?
Last but not the least, how much time have elapsed since the last time you applied for credit in any way will definitely affect your credit score as well. If they see that you’ve been applying left or right, they’ll think suspiciously of you and may believe that you’re using credit applications to finance your lifestyle and pay for old debts with new ones.

You’re already on the right path with an existing good credit score, and all you have to do is maintain it to continue enjoying the goodwill of your creditors. Few people can say they’re in the same boat as you so take care that you don’t lose what you’re lucky to have!