A good credit score is a necessity for anyone considering a home or car purchase. Even certain rental agencies will require a good credit score in order for a renter to secure housing. To make sure that you have the best credit score possible, you must properly manage your credit.
Here are some tips to help improve your credit score.
Remain Vigilant
Having a high credit score is essential, since it will impact any future financial decisions. However, very few people actively take part in watching the health of their credit. Inquiries or medical bills sent directly into collections can negatively affect your credit without you even being aware of it. By monitoring your credit report you will be able to notice any discrepancies and take care of them before they lower your credit score. Keep track of any loan or credit debt, since these affect 35 percent of your credit score.
Keep Credit Balance Low
Having credit cards and loans are some of the best and easiest ways to build credit. However, most don’t realize having a high balance on a credit card can hurt their credit score. To avoid high balances or maxing out a credit card, users should always try to keep their credit card balance below 60 percent of the card’s limit.
Pay Bills On Time
The number one cause for poor credit is delinquent bills. To maintain a good credit score, you should always pay all bills on time as well as try to pay a little above the minimum payment. If you are unable to pay all your bills on time, prioritize your installment loan payments as they will have the greatest impact on your credit score. Using online systems such as bill pay and automatic account withdrawal will lower the chances of late payments.
Having good credit could potentially save you hundreds, if not thousands, of dollars, since your score can affect many areas of your financial life. Learning to manage and improve your credit is a skill that requires diligent patience. Always remain aware of your finances and take responsibility of your credit. Doing so will improve your financial future and help you secure any desired loans in the future.