Good credit is not something you can be born into. It is also not given to you as a graduation gift. Credit is based solely on a person’s personal financial history, which is an accurate representation of his or her spending behaviors.
Having good credit does not happen by accident. People are consistent in their habits to obtain and maintain good credit. Likewise, credit scores can change and depending on your financial behaviors, you can either increase or decrease your credit score.
If you are looking for some guidance on boosting your credit score, then take a look at what the people who have stellar credit scores are doing on a regular basis:
1. Take Your Finances Seriously
While this may seem like obvious advice, it can’t be stressed enough. This means paying your bills on time, not putting too much on your credit card each month, not requesting too many credit cards in a short amount of time and just demonstrating overall good habits over several months. According to Daily Finance, just staying consistent with good financial spending habits goes a long way in keeping your score up.
“Having good credit is not an accident.”
2. Stick To The Ratio
Credit card companies like it when consumers only use 30 percent of their credit allotment at a given time. Even if you pay down your credit card every month, but are using it for everything and going over this ratio, credit card companies will be a bit nervous. Whatever your credit limit is, don’t let yourself go over the 30 percent mark.
3. Know Your Report & Score
Many consumers don’t think they can check their credit score as it will be detrimental. The truth is you should check your score, if anything to find errors or concerns you may have, as noted by Curtis Arnold, contributor for Forbes. Errors on credit reports can bring down your score more than you realize, and by periodically checking your report you can find inaccuracies and have them removed.
4. Use Your Credit Card
The reality is you have to use some credit to earn a good credit score. Therefore, find a credit card that has rewards and interest rates you feel comfortable with and use it accordingly. The key is to use it correctly, which means within your ratio limit and only an amount that you can pay down every month. You don’t have to use it a lot, but being consistent and demonstrating you can borrow and pay back each month is a sure way to boost you credit score and keep it up.
5. Leave Old Cards Alone
Many consumers believe that closing old cards is a way to eliminate previous debt and start fresh. Actually, it is the opposite. Your credit score is a history of your entire credit spending habits, so the longer that history reaches, the better off you are likely to be, according to Bankrate.
Having good credit is important for securing loans you want and interest rates that are feasible. It is easy to make a plan for attaining good credit, but getting in the habit of these financial behaviors is what’s more important.
There is no big secret to having a good credit score. It is simply using credit in a responsible way and making sure you pay it down every month. While it is easy to let your credit spending get out of control. Focus on getting your finances in order, and once you see your score start to rise it’ll become habit for you as well.