If you are reading this, then you probably already know how important credit ratings are towards securing loans and enjoying a low rate of interest on them. The problem is that a good credit score isn’t always the easiest to maintain. It’s based on your life’s financial track record up to that point, especially in relation to how you have handled your pending bills and such. In order to make sure that the next loan you apply for gets approved without a hitch, read on and find out how to keep your credit score high.
Timely Bill Payments
It is only natural to assume that the bills concerned here are that of your credit cards and loan payments, however, that is not quite the case. Something as simple as an unpaid cell phone bill or a parking ticket will also bring down your credit score. Pay all your bills on time because if you fall behind, your credit score will decrease.
Credit Card Balances Must be Low
Credit card companies are a complicated bunch and certain things that they do make little sense to the customer. For example, spending more than 30% of your maximum allotted credit limit may lower your credit score even if you pay off the balance in time! If you are wondering whether it will go up again if you pay out the balance on time, know that it isn’t an assured fact. By the time the credit card company gets around to reporting the fact that you have paid your balance, you might already have built up another significant balance.
Keep Old Credit Cards
If you have a good credit history with a card, it is advised that you keep it. Every closed card or loan is removed from your credit history after ten years or so and as a result, your average credit age will become shorter, which inevitably affects your credit score negatively.
Keep Your Loans in Check
Whether it’s a credit card or a loan, each new credit account lowers your overall credit score. Additionally, each new credit application lowers your average credit age as well. So, the idea is to keep your loans and credit card applications to a minimum.
Hire a Credit Repair Company
When you already have a very low credit score, interest rates will increase and new loans will be very hard to secure. Credit repair companies can help in such situations by working towards removing negative history such as late payments, foreclosures, liens etc. from your financial records. By the time they are done, even a very low credit score could reach a respectable point from which securing a loan seems like a viable possibility once again.
Maintaining good credit is a lifelong process, so you need to be careful about every financial step you take because in this day and age of technology, everything goes on record. Of course, you can always improve your credit rating, but doing that will be much easier and faster if you keep the points here in mind.