How to Build and Maintain a Good Credit Score by Scott Wolfrum

How to Build and Maintain a Good Credit Score

by Scott Wolfrum | May 8, 2023 | Finance, Scott Wolfrum

Your credit score is vital to your nancial well-being, as various nancial institutions and lenders use it to determine how to borrow money and obtain a credit card. Maintaining and building a good score can be challenging, but it’ll eventually pay o in the long run as it helps you manage your nances.

Understand the Factors that Aect Your Credit Score

Before working on it, understanding the various factors that aect your credit score is signicant. Some of these include your payment history, utilization, and length of credit. These factors comprise a considerable portion of your score and should be prioritized.

Make Payments on Time

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5/24/23, 11:03 AM How to Build and Maintain a Good Credit Score | Scott Wolfrum | Finance

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Making timely payments is one of the most critical factors to consider when building and maintaining a solid credit score. Late payments can negatively aect your score, so it’ll be vital that you regularly pay your bills on time. Having a set of automatic payments can help ensure that you don’t miss a payment.

Keep Your Credit Utilization Low

The utilization of credit is a vital factor that aects your score. Focusing on maintaining a low utilization level can help improve your score. Your utilization should be at most 30% of the available credit Paying o your high-interest credit card balance can also help boost your score

Build a Lengthy Credit History

Your length of credit history is also a vital factor that can aect your score. A long credit history can help lenders see that you can handle credit cards and other loans Getting a secured credit card can help build a more substantial credit history if you are new to credit.

Diversify Your Credit Types

Credit cards, mortgages, and car loans can also help improve one’s credit score But, before you apply for credit, make sure that it’s one that you can manage properly.

Monitor Your Credit Report

Regularly checking your credit report can help prevent fraudulent activities or errors You can get a free credit report yearly from one of the three major credit reporting agencies It’s essential to review and dispute any inaccuracies or errors in your report.

Don’t Apply for Too Much Credit at Once

Getting too many credit applications can negatively aect your credit score Limiting the number of applications you can submit is essential to prevent these from happening.

Although it can take a lot of work to build and maintain a good credit score, improving and gaining access to more opportunities in the future is worth it. Building and maintaining a solid credit score can help you avoid rejection by potential lenders and improve your creditworthiness

How to Build and Maintain a Good Credit Score