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5 Habits That Help You Maintain Your Good Credit Score

5 Habits That Help You Maintain Your Good Credit ScoreYour credit score is one of the most important numbers in your life. A good credit score can set you up for favorable lending terms. But, a poor credit score may mean you have to pay high interest rates – if you are able to get a loan at all.

While it might not be the most exciting topic to think about, paying close attention to the condition of your credit score is an important step toward a prosperous future.

To make sure you are managing your credit score properly, think about maintaining these five habits.

Use Your Credit

That’s right – it is good for your credit score to actually use your credit. By using credit, and then paying it off in a timely manner, you will be proving that you are a worthy credit risk.

Having no credit is almost as bad as having poor credit, so make sure to actively use at least a couple credit accounts. Of course, it should go without saying that you need to use them responsibly to avoid getting into debt.

Keep Credit Lines Open

Even if you have paid off a credit account, and you have no intention of using it anytime soon, it still may be worth keeping it open.

One of the elements of your credit score is the length of your credit history, so you want to keep some older lines of credit open for the benefit of this metric. Also, part of your credit score is the percentage of credit you are using, which will again benefit from keeping an account open which has a zero balance.

Stay Within Your Means

There are few things you can do which will be as helpful to your credit as simply staying out of trouble in terms of debt. Don’t buy more than you can afford, and you will be just fine in most cases. While it is good to use a credit card to build up your credit history, that card doesn’t mean you can spend as much as you want. Only make purchases as if you were making them with cash.

Monitor Your Credit

You should have no trouble at all finding a service which will help you monitor your credit over time. It is a good idea to use one of these services – you may even get this free with your credit account – to make sure that no surprise activity is taking place. You will see how your actions affect your credit, and you will be able to work toward a higher score using this information.

Find New Income Sources

Making more money is always going to be a good thing from a credit perspective. With a larger income, you won’t have to lean on your credit so heavily, and you will be able to avoid debt trouble down the line. Thanks to the power of technology, there are more ‘side hustle’ opportunities available today than ever before.

 

Do you have a good credit score? How do you maintain it?

 

Photo courtesy of: stevepb

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John Schmoll is a Dad, husband and veteran of the financial services industry. He's passionate about helping people learn from his mistakes so that they can live lives free from the shackles of debt and empowered to make their money work for them. You can check out his other sites: Frugal Rules, for ways to improve your financial literacy; and Sprout Wealth for tips on different ways to make more money. John has been featured on Forbes, Lifehacker, Yahoo Finance and US News & World Report and more. If you're wanting to grow your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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