Helpful Tips and Tricks to Achieving and Maintaining Good Credit

Helpful Tips and Tricks to Achieving and Maintaining Good Credit

Maintaining a good credit score is crucial for a car loan. If your credit score is bad, the majority of lenders will reject your car loan application. Even if your car loan is approved, you will be required to pay a higher interest rate. Here we have mentioned a few tips and tricks to achieving and maintaining good credit.

Know Your Credit Score

There are several ways to know your credit score. If you have a credit card or making a loan repayment, you can find your credit score on your monthly statement. If your lender or credit card company does not provide you credit score information on the monthly statement, you can call their customer service or write an email to know your credit score. Also, you can always use a credit score service to find your current credit score.  Since credit score changes every month, you need to keep yourself updated about the current credit score to improve and maintain a good credit score. 

Credit Score Range – Good and Bad

Credit scores range from 300 to 850, with 300 being the worst and 850 the best. If you have a credit score of 690 and above, your credit score is good and you need to maintain it. If you have a credit score below 690, there is a reason to worry and you will need to work towards improving your credit score and then maintain a good credit score. 

Tips to Achieve and Maintain Good Credit Score 

Pay Your Bills on Time, Every Time

Paying your loan installments and credit card bills on time is crucial to maintaining a good credit score. Paying other bills on time is equally necessary. If your bill payment is delayed, the service provider can send your account to a collection agency and it gets reported to the credit bureau, affecting your credit score badly. No matter how small the amount, you should make it a habit to pay your bills on time, every time. 

Don’t Allow Your Credit Card Balance to Increase

You should reduce the amount you owe to the credit card company. A larger credit card balance means high credit card utilization which affects your credit score. You should make a habit of paying the full outstanding amount on your credit card bill. To achieve a good credit score, you need to ensure you don’t use more than 30 percent of the credit card limit allotted to you. If you have many credit card payments, you need to consolidate them to make your payments manageable. 

Manage Your Loans

You need to repay your loans on time and avoid taking new loans unless necessary. Prepare a monthly budget and stop using cards to avoid new debt. Also, make a payment plan to reduce the debt in a timely manner. Save more to pay your high-interest debt first while maintaining timely repayments on other debts. Don’t apply for new credit cards often, as multiple credit inquiries affect your credit score. 

Now that you know what it takes to achieve and maintain a good credit score, you can start working towards improving and maintaining a good credit score.