Helpful Tips and Tricks to Achieving and Maintaining Good Credit

Helpful Tips and Tricks to Achieving and Maintaining Good Credit

There are several benefits of maintaining a good credit score, including faster approval of loans and lower interest rates. If you are applying to get a car loan in the near future, you need to find out your credit score and work towards improving if needed. Here we have shared some good tips and tricks to achieving and maintaining good credit.

Credit Score Range 

Credit scores range from 300 to 850. A credit score above 690 is good while a credit score above 720 is considered excellent. If you have a credit score that's less than 690, you need to take steps towards improving your credit score. If you have a credit score of 720 or higher, you need to maintain it. 

How to Find Your Credit Score

Knowing your current credit score is the first step towards improving and maintaining a good credit score. It is not hard to know your credit score. Your auto loan statement or credit card might have your score listed. Many lenders and credit card companies provide their customers with credit score information on the monthly statement. If your monthly credit card statement does not have such information, you can make a request for the same. Alternatively, you can use a credit score service to know your credit score like Credit Karma, which offers a free service that allows you to check our score without hurting it.

Tips to Achieving and Maintaining a Good Credit Score

  • Don’t Delay Payments: The golden rule to follow to achieve a good credit score is timely payments. You should never delay your loan or credit card payments. Also, you need to pay your utility bills and other service bills on time. If you make late payments, your account might be referred to a collection agency which gets reported to credit bureaus and hurts your credit score. 

  • Manage Debt: You need to manage your debt through proper planning. Prepare a monthly budget to curtail your expenses and save more money that can be used to repay your debt faster. Avoid using a credit card that increases your debt. Pay your high-interest rate debts first while making regular payments towards other debts. If you are having multiple card repayments, consolidate credit card debts on one credit card with the lowest interest rate. This allows you to make timely repayments.

  • Try Not to Increase Credit Card Balance: A high credit card balance also affects your credit score. According to financial experts, you should aim for a credit utilization ratio of 30 percent or below. If your credit card limit is $10,000 and you have a credit card balance of $5,000, your credit card utilization ratio is 50 percent, which is not good for your credit score. Pay the full outstanding amount in monthly credit card bills to reduce your credit card utilization ratio. 

  • Don’t Apply for Loans/Credit Cards Frequently: When you apply for a loan, the provider initiates a credit score inquiry to know your creditworthiness. Too many credit inquiries in a short period will affect your credit score. Avoid applying for loans frequently. 

No matter how bad your financial situation is, there are always ways to improve your credit score and maintain it. The tips and tricks above provide you with basic guidelines that will help you achieve the goal of getting and sustaining a good credit score.