You spent the last few years building up your credit by limiting spending on credit cards and making all your payments on time. Now you finally got the credit score that you were aiming for, but now what? A good credit score can help you get access to more and cheaper lines of credit, but how do you make sure that it doesn’t just go back down? The following tips can help you keep a good credit score after working so hard for that achievement.
Avoid unnecessary credit inquiries to keep a good credit score
A factor, although a tiny one, is the number of inquiries you have on your credit report. Once you see that you got a great credit score, you may be attempted to apply for many new lines of credit. This could end up hurting you and your credit score. Each time you apply to a new line of credit, an inquiry will show up on your account and stay there for two years. Even though it plays a minor role, this can still hurt your new credit score and affect access to credit.
Don’t open too many accounts too quickly
One of the largest factors in your credit score is the average age of your credit. Opening too many accounts in a short period of time could tank your average credit age, especially if you don’t have many credit lines. While also adding new inquiries, your credit score would lower until you hold the credit for a longer period of time.
In a similar vein, closing any open accounts that you have will also affect your average age of credit. If you’ve had a credit card for a few years and decide to close it because you got a new one, you would only be hurting your score further. Having both the cards would be beneficial for the length of credit and also your debt utilization. If you keep the old card, you will have a higher total credit limit to utilize.
Keep making payments on time to keep a good credit score
This one should be a no-brainer. You made payments on time to get your credit score and now you have to continue to do so to keep your good credit score. Remember that late payments will stay on a credit report for up to seven years, so they’re not easy to get rid of. Just keep making your payments on time and avoid using too much credit that would stretch your income.
Don’t use too much of your credit
Another large factor in your credit score is your credit utilization. You generally want to keep the amount of credit you use across all your credit cards to below 30% of your total credit limit. Of course, the lower you can keep it the better. One way to do this is to just pay off your credit card in full at the end of each month, if possible. This way you never have to worry if you are using too much of your credit and tank your credit score.
Remember that credit isn’t free money and just because you have access to more credit, doesn’t mean that you should use it. It can be easy to go crazy and start spending, but this could end up hurting you and your credit score in the long run. Also, always track your credit score using a tool like Credit Karma. These tools can show you how your credit score is progressing and also give you tips to keep your score high or even improve it.
If student loans are giving you and your credit score headaches, you could try refinancing them. Defynance offers a refinancing solution that uses income share agreements, instead of a traditional loan. This helps ensure that your payments are always affordable, so even if you’re in a cash crunch, it can be one less debt payment to worry about.
