Maintaining your good credit scores is more difficult today than it was in the past, but these steps will help.
The first and most obvious step is to always pay your bills on time. Those little dings on your credit report caused by late payments will chip away at your scores.
Next is to pay your credit card bills in full. Good money management means not buying things that you can’t really afford. So use the credit card for convenience or to get rewards, but then pay the bill. You’ll be free from interest payments – making your income go farther and giving you peace of mind.
Stay far, far away from your credit card limits – on every card.
This is the credit score protection that’s most difficult today, because so many credit card issuers decided to reduce credit lines, even for their best customers. The safest limit is to stay below 30% of your available credit. So if you have a $10,000 credit line, never let your bill go beyond $3,000.
But what if you need to make a purchase that brings you above 30% – and it has to go on a credit card? Some merchants don’t take checks, and an on-line purchase with a check can take days because the merchant will wait for the check to clear before shipping your merchandise.
If you are able to pay for the purchase in full, first check your credit card statement dates. Make sure the purchase you make today won’t be on a statement that’s issued tomorrow. If you’re close to the statement date, wait until your new statement is posted before you make your purchase.
Then go on line and pay your bill ahead of time. If you aren’t able to pay in full, pay enough to bring your balance back under 30% of your available credit.
Credit card issuers only report your statement balance. So by paying before your statement is issued, you’ll avoid the damage to your credit scores.
Next, if you’re shopping, never give your Social Security number to merchants who might make inquiry in anticipation of extending credit to you. Wait until you’ve made a decision on a purchase before giving private information, because multiple inquiries bring your scores down. So whether it’s a merchant account or a new credit card, if you want new credit, go after it slowly.
Finally, keep a close eye on your credit report. Errors and identity theft can destroy your credit rating, so they need to be caught and corrected quickly.
Author: Mike Clover