Five Ways to Keep a Good Credit Score

Happy Friday folks. I hope your week went well and your plans for the weekend allow you to recharge. As you can see, I have no intention of stopping the flow of information you can use to ensure you keep a healthy credit score.

I place an emphasis on our credit for a number of reasons. For one, many of us aren’t taught how influential credit is in our lives. If our parents didn’t give us guidance and our schools don’t teach us about the subject, we are bound to learn through trial and error. And the lessons are expensive.

Next, credit determines how we live. It can determine the neighborhood we reside, the car we drive, and even the job, especially in finance. Our lifestyle can be at the mercy of our credit score.

Also, I’ve had some tough lessons, including paying $32,000 for a Toyota Camry LE back in 2010. Like I mentioned above, trial and error is expensive.

Lastly, when used correctly, it can give us a lifestyle that we didn’t know we existed, including free groceries, vacations without paying out of pocket, and access to events.

I don’t want to hold you up but I want to give you five simple tips that can help you maintain a good credit score:

1. Pay Your Bills On Time -This is a huge factor in our credit score, specifically 35% of the credit report. Know your due dates and try autopay if possible so you don’t miss a payment. If times are tough, contact the “creditor” and see if they have grace periods, forbearances, or forgiveness programs.
2. Don’t Max Out Cards at the Wrong Time — Once debt usages gets above 30%, it can significantly drop your score. It’s best to stay at 9% or below if possible. Always know your statement closing date because that is approximately when the balance will be reported.
3. Apply for Credit Lines Sparingly — This means don’t submit numerous inquiries within a short window of time. Staying below three hard inquiries is key.
4. Check Your Credit Report Regularly — We are entitled to one free credit report every 12 months. However, due to COVID-19, we are given one free credit report every seven days if you visit freeannualcreditreport.com for a limited time.
5. Don’t Let Your Cards Sit — Some people are afraid of credit because they fear “debt.” It doesn’t have to be the case. If you’re not using credit to buy assets for cash flow, at least pay the bills that you were going to use with cash. Just link your credit card instead. In many instances, cards come with points so you’ll get cash or rewards for doing what you already do. Not using the cards to lead to the “creditors” closing the accounts due to inactivity which will lower your credit limits and, possibly, your score.

I’ll be sure to keep the tips coming. Follow me on Instagram @that_moneyhacker for advanced strategies and more!!