How to Improve and Maintain Your Credit

When it comes to your credit score, it is always best to build it properly from the start. However, some may not have this luxury. Whether you have produced a bad credit report because of student loans, credit card debt, or other tough financial times, there are ways that you can improve your credit. What will be more important is to maintain your good credit score after the improvements have been made.

Your FICO Credit Rating

Before you find out how to improve your credit score, it is important to know where you stand. The three credit bureaus will each have a score for you, and they will typically be anywhere from 300 to 850. If your scores are below 620, you will be considered a high risk, and will probably find it difficult to get any form of credit or loan.

Credit scores from 620 to 660 are considered uncertain and those with credit scores from 660 to 720 are acceptable. If you are in either of these ranges, you should still take steps to try to achieve a good (720 or more) or excellent (750 or more) rating.

Improve Your Credit

There are many ways you can improve your credit by changing old habits and coming up with new ones, and while I could never list them all, these guidelines will help you find ways to boost your credit score.

Pay your bills in full and on time –This takes up about 35% of your credit score, so you want to make sure you follow this rule. Just one late payment could be disastrous. Try setting automatic payments so that forgetting isn’t an issue, and you don’t have to worry about if you’ve paid all of your bills or not. If you should have to pay a bill late because you forgot or you simply couldn’t pay, try to convince your creditor to reverse any late fees.
Monitor your credit – Every year, you are allowed to see all three of your credit reports. Keep track of your credit reports and make sure you report any false or outdated information so that your report is as clean as possible.
Keep low credit card balances – If at all possible, don’t carry a credit card balance at all, and if you must, make sure you are making more than the minimum payments each month. Carrying a balance isn’t good, but you want to make sure the ratio between your balance and your credit limit is as low as possible. However, don’t try to open lots of new credit card accounts to raise your credit limit. This could cause alarm with the credit bureaus and it could have a negative effect on your credit score.
Stay in one place – Moving around a lot will make you look like you aren’t stable in your residency. This could reflect negatively on your ability to manage your finances. The same could happen if you change jobs frequently because it could seem like you can’t hold a steady source of income.
Be patient – Improving your credit score will take time, but you need to make sure you continue to make the right decisions. Don’t be hard on yourself and stick to a tight budget, and you should be able to improve your credit with time.

Maintain Good Credit

Maintaining a good or excellent credit score requires the same discipline that it takes to improve poor credit. Any negative information will typically stay on your credit report for seven years, and filing for bankruptcy will remain on the report for ten years. This is why it is so important to keep up your good habits while those instances are still on your report and make sure that no new bad instances need to be reported again. In short, make good decisions and you will see financial success.

Amanda Clark is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about credit cards for bad credit.

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