You’ve worked hard to earn a high credit score -- now what?
To stay in good standing and keep your borrowing rates as low as possible, some vigilance is required. Smart consumers know they should keep an eye on their excellent credit to make sure it stays that way.
This doesn’t demand much effort, either. Are you taking these basic steps to keep your high score from dropping?
1. Monitor your score.
It’s easier than ever to check up on your credit standing. Many credit card companies automatically provide your score as part of your account details, and various free online services will report your status to you, as well. If your number ever drops, review your report for mistakes.
2. Keep credit utilization in check.
Which is better?
Having one credit card with a $5,000 limit and charging $2,000 per month.
Having two credit cards with a total $10,000 limit and charging $2,000 per month.
It might not make a difference to you, but for your credit score, the $10,000 limit is typically better.
This means your credit utilization ratio is 20 percent instead of 40 percent, and a lower ratio helps you earn a higher credit score. In fact, credit utilization is one of the biggest factors that helps or hurts your score.
3. Never miss a payment.
It’s basic knowledge but worth revisiting: Enroll in automatic monthly payments so you never accidentally miss one.
Good credit scores are essential in today’s world. Wish you’d known these tips sooner? Feel free to share this information with a younger friend or family member who might benefit.
As always, please reach out if you have questions about your finances.