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Tips to get your credit in shape

Maintaining a healthy credit score requires a lot more than just making payments on time. Sometimes it’s hard to tell what will affect your credit, and because of this, millions of Americans are letting their FICO score fall through the cracks without even knowing it. Here are some tips that will help you achieve or maintain a credit score that will be an asset – not a hindrance – to your financial goals.

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Make all payments on time

Okay, so we know we said it takes more than just making on-time payments, but you still have to do at least this! Many people don’t make on-time payments – and not just because they don’t have the money.

If you want to have good credit, you’ve got to make payments on time. Most people don’t know which payments affect their report and which don’t, so it’s best not to gamble. Even a late library payment could end up hurting your score. So set alarms on your phone or calendar, keep a list of payment due dates, or do whatever you need to do to ensure you’re payments are submitted on time.

Keep credit balances low

A good rule of thumb is to only use 30% of your total available credit. This means that for every $100 of credit you have, try to only use $30. This is a liberal amount, however. People with the top credit scores are using less credit than this, usually around 15%.

Don’t close old accounts

The longer a line of credit is open, the higher your score will be. When you close out an account, it negatively affects your credit score. If you aren’t using an account, it’s best to let it be. You aren’t losing anything by keeping the account open.

At minimum, it’s a good idea to consult a credit counselor before you make the decision to close an account, so you can be sure you are in a place where your credit can stand a little hit.

Don’t go crazy with new accounts

Try to wait at least six months between credit inquiries. Any time you inquire into new credit, you score will be lowered. This portion of your credit score makes up 10%, so it has a definite pull. Waiting six months between inquiries will give your credit time to repair.

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