Maintain your Credibility
You depend on having a good credit score for: applying for loans to further your education, financing a car or home, even securing a job. In order to maximize the benefits of maintaining a good credit score, you need to foment good habits and discipline your spending. If you rule over your credit with an iron grip, you will have access to lines of credit and low interest rates, as well as a less stressful financial situation.
Follow a budget.
Create a budget so that you know how much you are paying what creditors per month if you cannot eradicate your debt every month. No more than 10% of your income should go towards paying off your credit bills. Make payments promptly and have one to four credit cards open at a time, but no more. Do your best to only charge what you can pay off in full at the end of the month. You don't need to pay interest over time to keep your credit card working towards your good credit score. You should use as little of your credit line as possible at a time. Using 10% of any credit line should be your goal, but keep your usage well below 80% to ensure that your credit score will remain positive.
Pay bills on time.
If you miss a payment more than one, your creditors can contact the credit bureaus and put a notation that you have been late one or more times in the last thirty, sixty or ninety days. These can and do count against your credit history, so call up the company that manages your credit and make the payment as soon as possible. They may be lenient with you, especially if you have been a good customer. Setting up automatic bill payments through your bank account is an especially good tip because you won't accidentally forget to pay a particular bill one month.
Limit your credit card applications.
You should limit your new credit card applications, since too many inquiries make you look like you are anticipating financial trouble. However, keeping a few dedicated accounts open as long as possible will help your credit, since the length of time you have accounts in good standing open boosts your creditworthiness in the eyes of creditors.
Making a budget, paying all bills off on time, and making sound financial decisions will help you maintain a good credit score. The benefits of having good credit will make your hard work and discipline towards your financial habits worth all the effort.
- Understanding Credit:
