Following a few simple practices to keep your credit score healthy and thriving might prove very beneficial in the long term! Here are a few tips to keep in mind:
- Understand WHY you should have an excellent credit and how it can benefit you - always good to have motivations!
- Understand what affects your credit score and what doesn't.
- Make sure to check your credit score annually and consider what activities might improve your score if needed. Be proactive and also check for errors.
- Think twice before purchase and buy only what you can afford to pay back.
- Pay bills on time. All bills! Not only loans and credit cards. Even small library fine could wind up your credit report if it is left unpaid.
- Stay within a credit limit to avoid additional fees.
- Keep your credit card balance low. The higher your credit card balance is, the worse your credit score will be. Your credit card balance should be within 30 percent of your credit limit to maintain a good credit score.
- Manage your debt. Having too much debt can cost credit score points and make it difficult to afford your monthly payments. The lower your debt, the easier it will be to maintain a good credit score..
- Don't close old credit card. When you close a credit card, your credit card issuer no longer sends updates to the credit bureaus and the credit scoring formula places less weight on inactive accounts. After 10 years or so, the credit bureau will remove that closed account's history from your credit report. If the account was an old one (which it would be after 10+ years), losing that credit history will shorten your average credit age and cause your credit score to drop.
- Try to pay more than just the minimum amount due each month to avoid additional fees and maintain credit rating.
- Limit your applications for new credit. Each time you apply for credit — whether a credit card or loan — your credit score takes a small hit. Credit inquiries are only 10 percent of your credit score, but if you have a high credit score (say 800), you stand to lose a lot of points (10 percent of 800 is 80). Opening a new credit account also lowers your average credit age (15 percent of your credit score). To maintain a good credit score, you should open new credit sparingly.
- Use Crent to furnish alternative data to credit bureaus to increase your chances for good credit score.
(source: How to Maintain a Good Credit Score)