Good credit can take years to build. Having an excellent Fico score can make it easier to qualify for loans and better interest rates. Once you have great credit you will want to maintain the credit rating you put so much time and energy into. We can learn some valuable tips from people who have and maintain their good credit rating. Here are 7 things people with good credit avoid.
1. They Don’t Rely on One Type of Credit
The credit-scoring model takes into account the types of accounts you have. A good mix of credit card (revolving) and installment loans works in your favor. It will add positive points to your credit.
2. They Don’t Wait Until the Due Date to Pay Off Credit Cards
They pay their balances every month to avoid debt and before the report date. The report date is when a creditor sends usage data to the credit bureaus. When you pay before the reports date it may help your score as it will report a zero balance.
3. They Don’t Stop Using their Credit Cards
It is important to keep your credit card accounts active. Make small charges and pay the balance off each month. Consider putting a small recurring payment on each card and mark your calendar to remind you to pay it each month, or set up automatic bank payments so you always pay your bill on time.
4. They Don’t Turn Down Credit Limit Increases
Credit limit increases are not a bad thing.
Don’t turn down the increase to avoid temptation. An increase in credit limit can lower your credit debt utilization ratio and help maintain or increase your credit score.
5. The Don’t Ignore the Fine Print
People with good credit know the terms of credit cards can vary greatly. They know the cards terms before applying. Pay attention to introductory interest rates and don’t get stuck paying unnecessary fees or higher interest rates.
6. They Review Their Credit Reports at Least Once per Year for Errors and Mistakes
You are entitled to one free credit report per year from the three major credit bureaus. Take advantage of your free reports and review your credit history for any mistakes or errors.
7. They Don’t Co-Sign Loans
People with good credit don’t put their credit score at risk
When you co-sign a credit card or loan you are running the risk of ruining your credit. If the primary account holder doesn’t pay on time or defaults not only does it report on the primary’s credit report, but it will report on the co-signers as well.
Take control of your credit and build a strong financial future by utilizing these tips. It is never too late to improve your credit.