Your credit score can sometimes feel like your weight after a long weekend of indulgence. If you never step on the scale, it never happened. Unfortunately, for both our jeans and our credit score, we all know simply refusing to know, doesn’t change the facts. Buying a home, leasing a car, or even getting a job requires a credit check—the step on the scale—and obviously, we want our credit to be in good shape so as to not risk our future. Here are a few tips to achieve a healthy score. Some of them may surprise you!
- Keep credit card balances under half of the total credit limit. Halfway and under says you know how to use credit without abusing credit. If you have more than that on your balance already, make getting under half your first financial goal.
- Stop using so many credit cards. Pay off credit card balances on small cards and use one or two cards for all purchases. Start with cards you only use once in a while and are easy to pay off, like store credit. Request a lower interest rate on the one or two cards you decide to keep. Bonus, you have an excuse for a smaller (new) wallet (budgeted, of course).
- But don’t get rid of old debt and good accounts. You can’t have good credit, if there isn’t any credit at all. Keep stable, low interest, high reward accounts open. The history of being able to use credit and repay, is what counts. Keeping these accounts can help illustrate a long repayment history.
- Pay bills on time. Many late payments will negatively impact your score.
- Review your credit report once a year in January. If you notice any errors, report these problems to each of the three major credit bureaus—Experian, TransUnion, and Equifax.
If you follow these small steps to steadily improve your credit, it will never come as a nasty surprise right when you don’t need it. Your pants on the other hand….there’s no guarantees.