These tips will help you maintain good credit standing. First, avoid applying for new lines of credit and be sure to pay off any charge-offs and collection accounts. Also, diversify your credit mix by keeping credit cards open. This will prevent you from building up a large debt load and increase your credit score.
Avoid applying for new credit
The best strategy when it comes to credit cards is to not apply for new lines. This is because your credit score will be affected by a new application. 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. A good credit rating will allow you to qualify for the best rates in loans, credit cards and rentals apartments.
Diversify credit
Optimally, you should have a mix of both installment and revolving credit. It is easiest to use revolving credits by opening a credit card and paying it off on time each month. To avoid interest, limit the amount you charge to your credit card so that you don't accumulate it. To prove that you can manage both installment loans and personal credit, you might consider getting a small personal loan.
Pay off charge-offs or collection accounts
Although it's not always easy to remove charge-offs and collections accounts, they are certainly worth your time. Smart planning can speed up the process, even though it will take some time.
Credit cards must be available
Maintaining at least one credit card account is the best way to keep your credit score high. This means using it regularly, not just keeping it open because you want the privilege of using it. Multiple accounts can complicate tracking and raise fraud risk. Experts recommend that you keep at least one card open in your accounts.
Do not make any hard inquiries
Applying for too many credit cards or loans in a short period of time can lower your credit score. Although a single inquiry won't affect your credit score, it is best to avoid multiple inquiries in the same year before you apply for a mortgage loan or mortgage. Hard inquiries are permanently recorded on your credit file for one year. Remember that lenders might consider other factors when making credit decisions.
Do not close credit cards if you still have balances on your other cards
A high credit score is maintained by not closing credit cards with balances. Because credit scores are dependent on the reporting activity of your accounts, you need to avoid closing credit cards while your balances are still on another card. You run the risk of becoming "credit invisible" if you close a credit card without paying it off. If you pay your annual fees on time, credit card companies may waive or convert fee-cards into no-fee ones.