Credit Scores are much like salaries at work. Most people don’t openly discuss them with each other and you probably could get yours a little higher with extra knowledge, work, and maybe even negotiation.
Not everyone has a credit score high enough that they don’t need to worry about it. In fact, no one has a credit score high enough that they don’t need to worry about it. Making sure you check your credit by looking at your credit report or making sure your credit card statements are accurate, is a very important way to maintain and build good credit.
Here are a few quick tips that can help you maintain and improve your credit score.
How to Build Credit
Apply for a Secured Credit Card: A secured credit card is backed by a down payment that you make on it. These cards aren’t meant to be used for a long period of time, but to show that you can make on-time payments. After a period of time, you should then be able to apply for a credit card that doesn’t require a down payment.
Get a Co-Signer: You can use a trusted co-signer to apply for a credit card that doesn’t require a down payment. This is another good way to build credit from scratch. However, it’s very important to know that the co-signer would be on the hook for any amount owed if the co-signee fails to pay the card.
Become an Authorized User on Someone’s Card: Credit card companies allow for users to allow authorized users to their cards. An authorized user isn’t obligated to pay the card, but will enjoy the benefit of building good credit.
How to Maintain Good Credit
Make Your Payments on Time: This is one of the most important factors for building your credit. If creditors note that you aren’t making on-time payments, they will be less willing to offer you credit.
Keep Your Credit Utilization Low: If you have a credit card with a $10,000 limit, you don’t want to have a balance of $9,000 after you make your monthly payment. It’s always best to pay off the balance in full if possible. If not possible, keep your available credit as high as possible.
Keep Your Accounts Open as Long as Possible and Don’t Open Too Many at Once: New accounts can lower your credit score, so you want to keep your credit accounts open as long as possible without opening too many too soon together in time.
Check Your Credit Reports Annually: The best way to know how you’re doing is to check up on your credit report.
Using these tips and being a smart consumer can help you start and maintain good credit.