Strong credit matters. Here are my tips for maintaining an excellent credit score.

 

When it comes to your financial health in general, your credit score matters. Maintaining a good credit score will make it easier for you to qualify for financing for a home loan, too. Here are my best practices for keeping a good credit score so that your financial ducks are in a row for your next purchase:

 

1. Pay on time. At 35%, your payment history is the largest part of your FICO score, so pay your bills on time to keep your score high.

 

2. Keep your balances low. Aim to use less than 30% of your credit limit. Pay attention to your score. Monitor your credit report regularly so you know where you stand. If you think your score is lower than it should be, consider running a credit report to see if there are any errors.

 

3. Be patient. While negative credit information is frustrating, it typically ages off your credit report after a few years, depending on your situation.

 

4. Shop smart. Do your research before you apply for any loans or credit cards to avoid unnecessary hard impacts on your loan that may lower your credit score.

 

"Be sure to pay off your cards each month and keep a low balance."

 

Now that you have some tips under your belt, here are a few common misconceptions about credit scores to avoid falling prey to:

 

1. Closing your unused credit card account will help your credit score. That’s not true; keeping your old credit cards will boost your credit history and potentially help your credit score.

 

2. Checking your credit score will lower it. When you check your credit score, it’s a soft impact that shouldn’t affect your credit at all.

 

3. Any debt will hurt your credit score. Not all debt is bad. For example, if you have a mortgage and you’re paying it on time every month, that will help your credit score. If you have excessive credit card debt, that will hurt your score. Be sure to pay off your cards each month and keep a low balance.

 

Hopefully, these tips will help improve your credit. If you have any questions, please feel free to reach out to us. We’re here to help.