One of the struggles of adulthood is getting a handle on your credit score – and once you do, maintaining a healthy credit score is equally necessary. Having a good credit score is imperative for getting good rates when applying for a loan or mortgage, so your credit score isn’t something you can ignore!
Overall, a credit score is a combination of the following:
- Credit history/length
- Capacity used
- Payment timeliness
- Types of credit used
- Previous credit applications
What is My Credit Score?
You should check your credit score at least once a year to be sure of your status (you can get one free report a year here), and to see if you’ve increased or decreased your score since you last checked. If your score has gone down, you should definitely do some sleuthing to find out what happened. It is possible to dispute penalties towards your credit score – click here to find out how.
Check your Credit Balance
In order to maintain healthy credit, it’s important that you utilize your credit cards in the smartest possible way. This means you shouldn’t have maxed-out credit cards, cards with a high balance on it for long periods of time, etc. A good strategy, if you have multiple cards with a balance, is to pay off the lower balances as quickly as possible (but don’t close out that card!) and work towards paying off the larger balances as you can. Having a few credit cards that are in good standing can also help maintain a healthy credit score, but don’t overdo it.
Continue to Make Payments On Time
If you are already making your credit card and bill payments on time – keep it up! That is one really easy way to maintain a healthy credit score as well as avoiding costly late fees. Not only is this easy to do, it is one of the biggest factors that can affect your credit score. A great way to ensure you are making on-time payments is to enroll in auto-pay if the company offers it.
Avoid Frequent Credit Inquiries
You may have noticed that when you make large purchases, businesses will check your credit score/credit history. While this is usually okay, it’s important not to have too many “hits” or checks in the same time period. While there is a difference between the effect of a hard credit inquiry and soft credit inquiry you should always be aware of who is requesting your credit history so you can avoid overdoing it.
Eastex Credit Union wants all of our members to be well-informed about their financial health. Contact us today about how we can help you maintain a healthy credit score!
