A negative credit score can affect you in several ways. When looking to purchase a car, home, or take out a loan for other reasons, a bad credit score can have you turned down or force you to pay high-interest rates, which can land you in debt. Maintaining a credit score that’s considered good or even great takes a lot of work, however.
Do you know how to maintain a good credit score? Great credit scores take hard work because no one starts off with a high score. Unfortunately, everyone starts off having no credit.
It’s then up to you to build good credit and maintain it. For some of the best tips on how to do just that, you’ll want to continue reading below. Here’s everything you need to know about good credit scores!
Pay Off All Debt Monthly
If you have multiple loans and debt to pay off, then you should pay off all your debt monthly to maintain good credit and to boost it as well. Although paying off the loans with higher interest rates first will help you save on those specific loans in the long run, if you want to boost your credit, then you need to pay off everything when it’s due.
A late payment can negatively affect your credit score and keeping debt at a certain amount of money owed can have a negative impact as well. Do your best to pay off each bill when it’s due. If needed, sit down and go through your finances to come up with a budget and repayment plan that’ll work for you.
Make Payments on Time
Making your payments on time can’t be stressed enough. Your payment history is factored into your overall credit score. If you have a poor reputation for paying your bills on time, then lenders might not be as open to lending you their money.
If you have trouble remembering when each bill is due, come up with a reminder system. You can place a whiteboard on your refrigerator and write down each bill, the amount, and the due date. You can also set reoccurring reminders when each bill is due on your phone’s calendar.
Signing up for autopay is another excellent way to ensure you’re bills are always paid on time.
Keep Balances at 30% or Lower
Unfortunately, just because you pay your bills on time, doesn’t mean you can take the money back out and maintain good credit. For example, if your credit card bill is due on the 10th of each month, and you make the payment but then use $100 on the credit card the next day, there will be a negative effect.
If you keep your credit cards and other debt at 30% or more, then it’ll bring down your credit score. If you can keep the balance on them at 30% or lower, then you’ll see a boost in your credit score. If you have a credit card that’s paid off, don’t close it.
Keep it open and keep it paid off. This will add to your credit history, which looks great!
Pay More Than the Minimum
If you want to boost your credit score fast, then you should start paying more than the minimum on all your debt. Even if you add $5 more to each payment, do so. This will help you get those balances to less than 30% quicker.
Sit down and go over your monthly budget. Where can you cut back in spending in order to place more money towards your debt and raise your credit?
Don’t Open Another Loan or Credit
If you’re already in debt and trying to boost your credit score, then you don’t want to open another credit card or take out another loan. This will only add to your debt. Instead, focus on paying off the cards and loans you currently have.
Once you bring your credit score up, you can then consider refinancing your loans and finding a different lender who can provide you with lower interest rates to help you save.
Check Your Score for Errors
Not only is it important to check your credit score on a regular basis to see where you need to make changes and what’s bringing it down, but it’s also important to do so in order to check for errors. There are times when errors are made on your credit score that can have a negative impact. Fraud is also real, and you should ensure there are no discrepancies when it comes to your score.
If you see something that’s not right, then address it, fight it, and have it corrected.
Complete a Credit Score Sweep
When you have several different negative items affecting your credit, it might be time to do a derogatory credit sweep. A credit sweep will address all negative items and dispute any items that cannot be verified. Once you’re able to remove some of these items, you’ll begin to see an improvement in your score.
Doing this on your own can be challenging. When you have professionals by your side to handle the sweep for you, you can have peace of mind knowing your credit will soon be on the rise!
Do You Know How to Maintain a Good Credit Score?
If you weren’t sure how to maintain a good credit score in the past, we hope you now have some insight into how to do so. Follow the tips and tricks listed in the guide above to help navigate you on your journey to a great credit score!
Does your credit need a sweep? It’s time to rid your credit of all those negative items.
See how you can boost your credit today with a derogatory credit sweep!