Guidelines to maintain your credit score
I’m going to be sharing 4 simple steps you can take to maintain a solid credit score.
And just as a quick note like most things in life it is much easier to maintain something than to fix it after it’s broken so once you do get a good credit score just follow these steps and you can coast and your score will get better over time with minimal effort pretty much on autopilot.
If it’s easier on your end here is the video version of this post
- The first rule is to never carry a balance
Paying your credit card balance in full every month is the best possible thing you can do to build your credit for a number of different reasons. First, it’s going to keep your utilization at 0%, it’s going to increase the number of on-time payments you have, and you’re never going to have to pay any interest on your spending. If you don’t do this at first it might not seem so bad but this is the classic trap with credit. Every month you spend a little more than you can pay off, then the interest kicks in, compound this over time and soon you’re one of those people who are deep in credit card debt and say credit cards are the worst things in the world and blame their financial troubles on a piece of plastic.
2. Don’t worry about utilization
I know this might come off as a shocker since I’m telling you not to worry about one of the most important factors of your credit score but hear me out.
The first reason is that credit utilization is not tracked historically. So even if you have a utilization of 99% you could pay it all off tomorrow and when it posts to your account it will be as if you never had it above 0%. Or alternatively, you could open up more credit to lower that utilization amount.
Also, if you’re following along with step #1 your utilization will always remain at 0% when the month comes to an end so let it get to whatever percent it reaches over the month because by the time that statement posts it’ll be back at 0%
3. Pay attention but don’t freak out over small changes with your credit score
Here’s the big reason why, minor fluctuations are just going to occur by a few points every now and then it’s just part of the game so don’t freak out about it.
Also, as long as you are in one credit group you get treated with the same creditworthiness as everyone else in the group. So for example, if you have a 751 or perfect 850 you’re going to have the same credit opportunities available because you’re within the excellent score range. So once you get over 750 go back to living your life.
4. Don’t actively try to improve your score
Once you’ve reached the excellent score range and are above 750 it’s time to go back to living your life and put credit on the backburner.
Don’t open any unnecessary credit accounts, or take out small loans, or get a car loan just to improve your credit score. Because you’re already in the excellent group range you’ve already won the game.
It’s kind of like if you were to cook an awesome dinner you’ve prepped everything, set the table, and started cooking your meal everything is good to go. But you decide to just leave it in the oven for an hour longer than you should. It’s going to be burned and could lead to the meal being ruined. You already did everything you needed to now don’t overcook the meal because you might end up getting burned too.
So with that just follow these guidelines and you’ll be able to maintain an excellent credit score with hardly any effort at all.
Also, comment, some guidelines you guys live by that have made your life easier. They could have to do with credit or really any other topics, like fitness, diet, relationships, let’s fill the comment section with some guidelines to help everyone out.
Looking forward to seeing what you folks say!
Italo
