A credit score can be what stands between you and necessities such as a car or a house. When it comes to understanding the nuts and bolts of credit scores, there is one main thing to keep in mind: you can change your credit with some work and time.
Most people understand that paying bills on time assists in obtaining a good credit score, but there are many other factors that contribute to it as well.
Here are a few methods you can implement to ensure you maintain good credit scores.
1. Automate bill Payments
If you have a hard time keeping track of bills, it goes a long way to automate your payments every month. Paying your bills on time is a huge component of maintaining a good credit score. It’s also a good way to protect yourself by staying on top of your own statements. Consider setting some time at the top of the month to plan out what payments are due when, and how you can manage the balance or pay your bills on time while still having money left in the bank.
2. Get a Credit Card
It may seem counterintuitive, but not having a credit card looks worse on your credit score. Having a credit card ensures you have a credit utilization ratio. The more credit you’re able to access and pay off regularly, the higher your credit score will be. Paying your credit card on time is really important, so take this into consideration when automating your other bill payments.
3. Don’t Close Unused Credit Cards
Having an unused credit card on your report might seem like a bad idea, but as long as it’s not costing you in fees, it can potentially be a smart strategy. Closing a credit card account can have the potential to affect your credit utilization ratio. It’s ironic that having more than one credit card could be better for your credit score. It’s a similar effect to not having a credit card at all, they want to see you having accounts and using them, as opposed to having fewer open accounts.
4. Watch your Usage
Having a credit card can make it easy to get what you need whenever you’d like. It’s a dangerous and helpful financial tool, especially in emergencies, and it’s vital that you watch how you use it. If you need to make a big purchase, consider your plan to pay it back on time.
5. Hire Some Help
If you’re having trouble getting traction on building your credit back up or keeping it at the same level, there are some resources that can support you. Cheap tradelines are just one of the many options you have to assist you in getting your credit score under control.
These are a few good methods for how to define a good credit score for yourself. In its current state, the credit system makes it difficult for many people to achieve good credit. Keep your determination, perseverance, patience, and the following tips in mind when it comes to keeping a good credit score.