5 Ways To Keep Your Credit Score As High As Possible
A good credit score is a marker of your financial health and can help you achieve better savings and also help you avail many benefits such as low interest loans and credit cards with better terms.
Keep A Tab On Your Payment History
The easiest way to keep your credit score high is to ensure your payments are always made on
time. Even if a bill is disputed you should try your best not to skip making the payment. In case you foresee trouble in paying a bill you must share this with your lender the moment you know of the situation. If you are not in a position to pay the full amount due, you must try to pay the minimum amount. That is the least you must aim at paying.
Do not shut old credit card accounts
If you draw curtains on your old credit card accounts, the issuing authority stops sending updates to the credit bureaus. When the stipulated time has passed, the history of the closed account will be removed from the credit report. Your score will drop when this credit history is lost and it will also lead to shortening of your average credit age. Besides, the total credit available to you will also go down. New credit accounts have a low credit score. Even if you transfer an old account to a new one, the new account is counted as new credit. So, it is wise to keep old credit accounts open, even if unused.
Be Wise While Using Credit
Your credit score will get lower if the balance on your credit card is higher in comparison to the limit. Do not ever cross your credit limit if you want a better credit rating, as in doing so you are borrowing more than what is authorized. In fact, you should use within 30-35% of the credit that is available (including loans, credit cards, and lines of credit). The more credit limit you use, the more you are seen as a risk even if the fact might be you are paying your bills on time every month.
Use different types of credit
When using a mix of credit types such as car loan, line of credit, credit cards etc, chances are your credit score will go up as against when you use a single credit product. But before doing this, be sure that you will be able to return the borrowed money on time or again your credit score may drop.
Limit credit applications or inquiries
The more you ask for or inquire about credit, the more your credit score is likely to get negatively impacted. In simple words, the number of times you ask about a loan or a credit card, you credit rating is likely to fall. This is because such activities or credit checks lead the lenders to believe you are trying to urgently seek credit. You can monitor the number of your credit checks by shopping around from different lenders within a two-week time frame as such inquiries are considered a single inquiry.