It's important to maintain a good credit score. This can determine how much you end up paying in interest, whether or not you can get a loan and at what rate, and even if you will be accepted by a co-op board when trying to buy an apartment. So, it is an issue that you need to stay on top of. You can't be irresponsible and simply use credit without understanding how it can negatively effect your future. Here's a few key ways to make sure you maintain good credit.
Keep An Eye On Your Score
The first thing you need to do is find out your credit score. You can do this by signing up with a free service that will provide you with the info. There are many available, so choose one that seems the most user friendly. Also, don't be concerned that checking on your score can have a negative impact on your score, because it won't.
It's a good idea to look at your score and see if all the information is correct. If there are any accounts that are listed that are inaccurate, or if any other information is inaccurate, then you need to correct it.
Don't Mass Apply For Credit Cards
One thing you should try and avoid is applying for lots of new cards in a short period of time. Having multiple cards is not the issue, it's more a case of the flood of new applications all within a short timeline. This can suggest a financial issue that is of concern. So, it's better to research the different credit card offers and then choose the one that looks the most appealing and apply to that one.
Don't Use Too Much Of Your Available Credit
Another factor in your credit score is a concept called credit utilization. Basically, the lower the number, the better it looks. So, the less amount of available credit that you use, the better. This is why people will advise against maxing out credit. So, for instance, if you have $10,000 in available credit, it would be much better to have a balance of a couple hundred dollars, than several thousand.
Don't Miss Payments
This one should be obvious, but many people fail to recognize the importance of never missing a payment. Late payments are a huge factor in your credit rating. And they can cause you to end up with higher interest rates. So, it makes sense in the long run to pay on time.
Be Careful Of Canceling Other Cards
If you do have open accounts that you don't currently use, you might think that you should close them out to streamline your profile. However, consider keeping them open. Old accounts in good standing can help a credit score. One of the determining factors in how good your credit is, is the length of time you have had credit. So, old accounts actually keep your score high.
