subject: How to keep a good credit score [print this page] How to keep a good credit score How to keep a good credit score
Keeping a good credit report is not difficult but requires some planning and understanding of the factors used for calculating the score. While most of it is common sense, there are certainly a few things worth reminding. Read on to discover how to save your credit score from dropping.
Make payments on time
Even though it sounds obvious try to remember if you had any payments late just a couple of days because of procrastination. Maybe you've had the money but the post office was too far away or you just didn't feel like spoiling a lazy afternoon with financial matters. Whatever the reason, even a couple of days late will have an impact on your credit report which is worth to keep in mind. It's best to get into a habit of sorting out the bills first before putting your feet up.
Talk to lenders
We all know that some essential expenses simply pop out of nowhere. It may happen that at the end of the day you haven't got enough money to pay your bill. The proper course of action in this case is to get in touch with the company you owe the money to and talk to them about it. It's not a shame, most people have been in this kind of situation at least once. In vast majority of cases the payment will be deferred and will not have any negative impact on your credit report. If it can't be deferred, well, at least you've tried.
Limit credit usage
Credit cards tempt with readily available thousands in credit. If you, however, don't really have to use that money try to limit yourself. It is generally assumed that using more than half of credit available to you will make your score drop. Funny enough, on the one hand lenders offer you the money in hope of earning interest on it on the other hand though they fear that if you use all of the credit, chances are your financial situation isn't very healthy.
Avoid new credit applications
There are two possible ways in which your credit score could suffer after making a new credit application. Firstly, when your application is not approved. From the bank's perspective, if someone didn't want to lend you the money they probably had good reasons not to.
Secondly, after applying for too many loans you may be considered as over-commited. Lenders may think that your existing monthly repayments may crash your financial stability.
Check your credit report regularly
Checking credit report is free and usually only takes a few minutes so why not check it regularly? Staying on top of your financial situation is essential if you seriously think of taking up a mortgage or any other large financial commitment. Please remember, it's much easier to maintain a good credit score rather than improve a bad one.
