Here are a few tips to help you keep your credit score in good standing. To begin with, you should avoid opening new credit lines. Next, make sure that you have paid off any collections accounts and charge-offs. Also, diversify your credit mix by keeping credit cards open. This will reduce your debt load and improve your credit score.
Don't apply for new credit
It is best to avoid applying to for new credit lines when it comes credit cards. Because a new credit application will affect your credit score, Also, you should not apply for new lines of credit if you are already in debt. Instead, work on consolidating your debts and saving money for big purchases. Credit score is a key factor in determining whether you are eligible for the lowest rates on loans, credit card, or rental apartments.
Diversify Credit Mix
The ideal mix of revolving and instalment credit is optimal. Open a credit line and make your monthly payments. This is the best way to utilize revolving credit. Keep in mind that you should only charge what you are able to afford to pay each month. This will prevent you from accruing interest. If you don't have an installment loan yet, consider taking out a small personal loan to demonstrate that you are capable of managing both types of credit.
Collection accounts or charge-offs repaid
While it can be difficult to get rid off charge-offs or collection accounts, it is definitely worth trying. It will take time but smart planning will help you speed the process.
Credit cards: Keep your eyes open
A minimum of one credit card account is essential to maintaining a good credit score. This means you should use it often, not just keep it open for the privilege. Multiple accounts can be difficult to track and could increase fraud risk. Experts recommend that you keep at least one card open in your accounts.
Avoid making hard inquiries
You can lower your credit score by applying for too much credit cards or loans at once. A single inquiry will not affect your credit score. However, it is better to avoid multiple inquiries throughout the year before applying for any mortgage or loan. Hard inquiries will be recorded on your credit reports for one year. They stay there for two. Don't forget that not all credit decisions can be made based solely on your score. Lenders might also consider other factors.
Don't close your credit card if you have balances on another card
Maintaining a high credit score means not closing credit card accounts while you still have balances on another credit card. Your credit score will depend on how you report activity. If you close a card without paying it off, you run the risk of being "credit invisible." If you pay your annual fees on time, credit card companies may waive or convert fee-cards into no-fee ones.