These are some tips to keep your credit rating in good standing. Do not apply for new credit lines and pay off all collections and charge-offs. Also, diversify your credit mix by keeping credit cards open. This will help you avoid building up large amounts of debt and increase your credit score.
Do not apply for credit extension
It is best to avoid applying to for new credit lines when it comes credit cards. You will lose your credit score if you apply for a new line of credit. Additionally, you should not apply to for new lines of credit if your debt is already high. Instead, work on consolidating your debts and saving money for big purchases. Good credit can help you get the best rates for loans, credit cards, or rental apartments.
Diversify credit
The ideal mix of revolving and instalment credit is optimal. It is easiest to use revolving credits by opening a credit card and paying it off on time each month. To avoid interest, limit the amount you charge to your credit card so that you don't accumulate it. A personal loan is a good option if you don’t have an existing installment loan. It will demonstrate your ability to manage both types.
Pay off charge-offs or collection accounts
It is not always easy to get rid of charge-offs and collection accounts, but they are definitely worth tackling. It will take time but smart planning will help you speed the process.
Credit cards are not closed
To maintain a high credit rating, you should have at least 1 credit card account. This means you should use it often, not just keep it open for the privilege. You may have more accounts than you need and it may be harder to track them. This could also increase your chance of being hacked. While it is recommended to keep all your accounts open at all times, experts suggest that you only have one card.
Avoid hard inquiries
Applying for too many credit cards or loans in a short period of time can lower your credit score. Although a single inquiry won't affect your credit score, it is best to avoid multiple inquiries in the same year before you apply for a mortgage loan or mortgage. Hard inquiries are kept on your credit report for one-year and remain there for two years. Keep in mind, not all credit decisions are made on the basis of your credit score. Lenders may consider other factors.
Don't close your credit card if you have balances on another card
Maintaining a high credit score means not closing credit card accounts while you still have balances on another credit card. Your credit score is dependent on the activity reported on your accounts. The risk of being "credit invisible" is high if you cancel a card before paying it off. Some credit card companies waive annual fees and convert fee cards into no cost cards if they are paid off within a reasonable timeframe.