A good credit score means that you’ll get easier access to credit and pay better interest rates when borrowing money.
A credit score above 650 is considered good and anything below 618 is below average, according to home loan specialists, Ooba. Paying your accounts late or having too much debt can mess up your credit score, so make sure you keep your score lean and clean.
Here are some tips on how to keep your credit squeaky clean:
How to maintain a good credit score
Pay your bills on time: Consistently paying your bills on or before their due dates is one of the most critical factors in building and maintaining a good credit score. Payment history accounts for a significant portion of your credit score, so make sure to pay your credit card bills, loan payments, and other obligations promptly.
Keep credit card balances low: Credit utilization, which is the percentage of your available credit that you’re currently using, is another crucial factor in your credit score. Aim to keep your credit card balances low, ideally below 30% of your credit limit. The lower your credit utilization ratio, the better it is for your credit score.
Avoid opening unnecessary credit accounts: Each time you apply for new credit, a hard inquiry is generated on your credit report, which can temporarily lower your credit score. Avoid opening multiple credit accounts in a short period and only apply for credit when necessary.
Monitor your credit report regularly: Obtain free copies of your credit report from the major credit bureaus (Equifax, Experian, and TransUnion) and review them for any errors or inaccuracies. If you find any discrepancies, dispute them promptly to ensure your credit report reflects accurate information.
Maintain a diverse credit mix: Having a mix of credit types, such as credit cards, installment loans, and retail accounts, can positively impact your credit score. However, avoid taking on credit you don’t need solely to improve your credit mix, as it’s better to manage the credit you have responsibly.
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