10 Ways to Maintain a Good Credit Score

Your credit score is important, and when you take out a loan, your lender is paying attention to it. If you aren’t, you could be in a tough situation when you find your terms to be suboptimal. Many people find themselves in such a situation, but there are a number of things you can do to ensure your credit score stays high and healthy.

A good credit score is generally considered to be above 700 in the commonly-used FICO score system, though some lenders may have slightly different standards. This system ranges from 300-850, and it’s definitely better not to be at the lower end of that range.

When you have a low credit score, lenders will be much less willing to give you good rates. Life can end up more expensive due to climbing interest rates. The opposite happens when you have a good credit score. You will gain favorable deals on loans and certain transactions will become much easier. If you follow these ten pieces of advice, you can ensure that your credit score stays high.


1. Know What Makes up Credit

Your credit score is a complex calculation of a few easily understandable concepts. These are: your payment history, your level of debt, the age of your credit, and the different types of credit you have. These are all important things to keep track of which will help you determine the weak areas you need to work on.

2. Pay your bills on time

One of the most important things to do to maintain a good credit score is to pay all of your bills on time. When a lender is considering you for a loan, their most important indicator about whether or not you’ll pay them back in the future is whether you’ve paid other lenders back in the past. Showing them you’ve done that will reassure them that you’re a trustworthy and responsible individual.

3. Monitor your Credit

A good step that all people should take towards credit responsibility is monitoring their credit by following changes to their credit score. Doing this will help you identify your strengths, as well as weak spots that you may have. Figuring out these weak spots will help you figure out what to do to change things for the better.

4. Keep a good debt to income ratio

Your Debt to Income Ratio, or DTI, is your monthly income compared against your monthly debt payments. Your goal is to keep this low by not taking out more money in loans than you earn in income. If you manage this effectively, lenders will see that you’re a responsible person.

5. Live within your means

It might seem like basic common sense to live within your means, but many people fail to do it. Failure to live within one’s means can lead to spiraling debt, which obviously leads to a very poor credit score. All you have to do to live within your means is not spend more than you have. One way to help with this is to keep a budget of incoming and outgoing cash flow.

6. Keep credit card balances low

Using your credit cards frequently is actually a great idea when trying to attain a high credit score, but it’s equally important to pay them back frequently. Constantly using and paying off your credit cards to keep the balances low will show lenders you’re responsible with your credit and will go to great lengths to help achieve a high credit score.

7. Keep an emergency fund

Keeping an emergency fund is great advice for anyone, but it’s especially good when you need to maintain a good credit score. If you have a fund for unforeseen circumstances you can ensure you won’t need to go into debt to pay for things like medical bills or other emergencies. Besides, the last thing you want to think about in an emergency is how it’s going to affect your credit score, so this is just one more way to keep things under control.

8. Don’t apply for new credit too often

Constantly applying for new credit will send a red flag to lenders that you might not be a responsible person. What’s more important is to maintain the credit you have in a responsible manner. Whenever possible, pay off loans that you have before taking out new ones.

9. Have a good mix of debt

Having multiple types of debt or credit can look very good to lenders. The reason for this is that it will show lenders that you have experience with multiple types of debt. If you have taken out a lot of the same type of loan and paid them all back, this will definitely show lenders that you’re responsible with paying back debt, but if the only type of loan you’ve taken out before is a personal loan, it won’t show the lender that you have experience with mortgages. Make sure to take out and pay off many types of loans to maintain a good mix of debt.

10. Pay attention and report errors

If someone gets control of one of your credit cards, they may begin to rack up debt without you noticing. Aside from this, there are a number of other errors can occur that might add fraudulent charges to your accounts. To keep on top of this, frequently check your credit statements to make sure nothing untoward is happening. Report errors when they occur to stay on top of them, and nothing like this will affect your credit score.