How to Maintain a Good Credit Score

Although it’s possible to repair poor credit, it’s much better to maintain good credit right from the beginning. Here are some tips for those who are just starting out with building their credit or who have good credit already and want to keep it that way.

1. Check your credit report. You can do that at www.creditreport.com/equifax. It’s important to know what is on your credit report because it’s possible that your report contains inaccurate and damaging information. Contact the Federal Trade Commission at http://www.ftc.gov to clean up any wrong information.

2. Pay all of your bills on time. This applies to all of your bills, not just your credit card bills. Late payments of any kind can end up on your credit report.

3. Open both a checking and savings account. Although checking and savings accounts aren’t forms of credit, they demonstrate a certain level of stability and are thus attractive to potential lenders.

4. Take advantage of someone else’s good credit. For example, have your parents or a spouse with good credit co-sign a loan for you. This is the most common way for a young person to establish a good credit rating.

5. Apply for a secured credit card. If you don’t have anyone who is willing to help you get started with credit and you are unable to get a credit card of your own, apply for a secured credit card. Secured credit cards require you to deposit money with a lender, and your credit amount is generally limited to the amount of money you have deposited. Be cautious when it comes to selecting a secured credit card – scams abound. Check out bankrate.com for a list of legitimate secured credit card issuers. Some secured credit cards become conventional credit cards after 12 – 18 months of on-time payments.

6. Us a revolving account regularly. This is where a lot of people get into trouble, so be careful! Using your credit card regularly results in your credit report being updated regularly. Be careful not to ever charge more than 30% of your limit and pay the card off in full regularly, preferably monthly.

7. Take out an installment loan. Installment loans should be short-term loans with a duration of two years or less. A single piece of furniture may be a good thing to start with, especially if you are still living at home but are in the process of preparing to get your own place. Not only will you have a piece of furniture that you can take with you when you move out, you’ll also have a start on establishing your credit history.

In just about any aspect of life, fixing something that is broken is harder than keeping something from breaking in the first place. Keep that in mind as you strive to maintain a good credit rating.