Protection for Your Credit
In an age of paperless spending, online shopping, and a suffering economy, good credit is hard to come across. But once you’ve got it, you have to keep it. The benefits of good credit are endless including getting a good rate on a mortgage for your dream home or a low financing rate for that ideal mid-life crisis sports car. There are a few tips that can help you maintain your good credit.
Open with caution
Use your credit with caution. When opening a new account, determine if you need to open the account and how it will benefit you. Also, be aware of the types of accounts you open. If you determine that you need to open new accounts, do so sparsely. Do not close miscellaneous accounts as this may hurt your credit as well.
Spend with caution
Charge only what you can afford and make your payments on time. With credit, it is easy to have a purchase now, pay later attitude. But spending beyond your means, will only hurt your credit now and later. Late payments can raise the Annual Percentage Rate (APR) and prevent increases in credit limits, in addition to hurting your good credit.
Use as little of your credit limit as possible. Maxing out credit cards will negatively affect your credit. Set a goal to never use more than 75% of your credit card limit. In doing so, you assure you will never go over your limit.
Check your credit annually
Each person is entitled to one free credit report from each of the three credit bureaus each year. Use this to your advantage and get your 3 free credit reports annually at www.annualcreditreport.com. Once you get your reports, examine them thoroughly. If there are any disputes or abnormalities, address them immediately.
If you choose to more carefully monitor your credit, you can subscribe for credit monitoring through your credit card company or bank for a small monthly fee.
Use it to your benefit.
People with good credit are usually eligible for better rates. Research and talk to your creditors about lower and better rates. For example, you can discuss decreasing your APR on your Visa credit card or refinancing your auto loan.
There is no formula for getting or keeping good credit, but obtaining good credit is only half of the battle. Keeping it involves making wise, cautious decisions.