Five Ways To Keep Good Credit

Having good credit simply makes life easier. A good credit report allows you to get needed loans for a car, home or any other necessary major expenses. Good credit also helps you get the most favorable rates for said loans. You say you've already got good credit? Great. Here are five ways to make sure it stays good. Limit Your Sources of New Credit. Just because you can get a loan doesn't mean you should. Every time you apply for a new loan or credit card, the potential lender pulls your credit report, which has a detrimental effect on your score. Save your credit power for when you really need a big loan or there is a good reason to apply for credit. A free promotional hat is not a good reason. A significantly low regular fixed APR often is. Make Timely Payments. Every time you miss or are late with a payment, your credit score takes a hit. Be sure to make at least the minimum payments on time. If you can't, you may still be able to protect your credit rating to some extent by contacting the credit card company, explaining your situation and trying to work out a satisfactory arrangement for getting your payment schedule back on track. Check Out Your Credit Report. It is possible your credit rating is being hurt through no fault of your own. There is always the possibility of incorrect information resulting in bad credit on your credit report, either because someone has been tampering with your credit or simply due to an error in the transmission of information. By regularly monitoring your credit report, you can correct these errors as they happen and make sure your credit rating stays as good as it should be. Get started now with a free credit report online. Know Your Utilization Ratio. The utilization ratio is the ratio of the total amount of credit offered you by lenders to the amount you have actually used. The more unused credit you have available to you, the higher your utilization ratio. If you can keep yourself to about a third of your available credit, your credit rating should remain strong. Maintain a Strong History. You should prioritize your relationship with the credit cards you have held the longest. Establishing a long, positive history with a credit card company is a great way to maintain good credit. Potential lenders are always on the lookout for long term low risk clients, and an extensive positive record with a credit card company is considered a good indicator of such a client. Financial directory