Credit Score Tips: How to Achieve and Maintain a High Credit Score
Pay bills on time.
Late payments can do serious damage to your credit score and stay on your credit history for years. Make sure to always pay your bills on or ahead of time; payment history is the most important component in determining credit score. If you think you might forget a payment now and again, look into setting up automatic payments. Different strategies include setting phone reminders, keeping a journal, and setting up notifications to remind yourself!
Keep credit card balances low.
It’s equally important to keep your credit card balances low, so do not overutilize your available credit! Credit utilization ratio accounts for about 30% of your credit score and is the second most important factor to be mindful of. This means that a good rule of thumb is to use no more than 30% of your available credit. If you find yourself nearing the 30% credit threshold, make an early payment to bring your balance back down.
Keep credit card accounts open.
Do not apply for new credit frequently. Not only will it lower the overall age of all your accounts, but it will most likely also result in a hard inquiry that can cause a decline in your credit score. Try to limit applying for new credit or increasing your credit line to no more than once every 6 months.
Limit new credit.
Do not apply for new credit frequently. Not only will it lower the overall age of all your accounts, but it will most likely also result in a hard inquiry that can cause a decline in your credit score. Try to limit applying for new credit or increasing your credit line to no more than once every 6 months.
Review your credit report.
Every year, you are allowed one free credit report from each of the three main credit bureaus — Experian, TransUnion and Equifax. Mark it on your calendar to request these credit reports every year to make sure all information is accurate. A good strategy is to space out these requests (one every 4 months), so you are always up to date on where your credit history stands.
If you don’t have a credit card yet, now’s the time to get one! If you haven’t built up any credit history yet or don’t want to worry about having your credit checked, consider applying to Tomo. Tomo’s in the next generation of credit cards that doesn’t require a credit score, so applying for one will never affect your credit score and your card can help you build the credit score you are looking for!
