Here are a few tips to help you keep your credit score in good standing. Keep your credit score high by avoiding new lines of credit. Also, pay all collection and charge-off accounts. Keep your credit cards open to diversify your credit portfolio. This will help you avoid building up large amounts of debt and increase your credit score.
Don't apply for new credit
Avoiding new credit card applications is the best strategy for credit cards. This is because your credit score will be affected by a new application. Also, you should not apply for new lines of credit if you are already in debt. Instead, focus on paying off your existing cards and saving up for a large purchase. A good credit rating will allow you to qualify for the best rates in loans, credit cards and rentals apartments.
Diversify credit
The ideal mix of revolving and instalment credit is optimal. Revolving credit can be used in the easiest way possible. You simply need to open a card and make payments on time every month. Keep in mind that you should only charge what you are able to afford to pay each month. This will prevent you from accruing interest. To prove that you can manage both installment loans and personal credit, you might consider getting a small personal loan.
Payment of collection or charge-offs
It is not always easy to get rid of charge-offs and collection accounts, but they are definitely worth tackling. Although this can be a slow process, you can make it easier by planning ahead.
Credit cards are not closed
A minimum of one credit card account is essential to maintaining a good credit score. 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. Most experts recommend keeping most of your accounts open, but it is a good idea to only keep one card.
Avoid making hard inquiries
Credit scores can be lower if you apply for too many credit cards and loans within a short period. While a single inquiry doesn't impact your score, it's best to avoid multiple inquiries during the year before applying for a mortgage or loan. Hard inquiries are kept on your credit report for one-year and remain there for two years. Keep in mind that not all credit decisions are based on your 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. If you close a card without paying it off, you run the risk of being "credit invisible." If you pay your annual fees on time, credit card companies may waive or convert fee-cards into no-fee ones.