A good credit score is vital for securing loans, getting credit card approval, or obtaining financing for large purchases. If your score is in bad shape, you may find yourself in a difficult situation when you really need financing. However, if you utilize best practices to keep a good score, good credit should make it easier for you to get the funds you need.
1. Pay bills on time
One of the best things you can do to keep your credit score in good shape is to pay all your bills when they're due. If you have trouble remembering to do that, consider setting up automatic payments with all or some of them. You can also take advantage of Nevada State Bank's online bill payment offering to make paying your bills more convenient.
2. Check your credit report regularly
Check your credit report on a regular basis to make sure it is accurate and keep an eye on issues that may be dragging your credit down. If there are errors, get them corrected so that your score rises. You can also track what actions are having a positive impact on your score as encouragement to continue those good habits.
3. Pay your credit card balances down
It's a good idea to keep your credit card balances low. The higher your balances remain, the more likely you will see your score suffer. Making regular, on-time payments will make a big difference, but making payments that are larger than the minimum amount due will have a bigger impact.
4. Don't close out old credit card accounts
If you have older credit card accounts that you no longer use, consider keeping those accounts open. Simply having these accounts open with a remaining balance of 0 will benefit your score.
As Jonathan McFadden at SmallBizClub explains, "Credit scoring models evaluate the average age of your accounts when determining your credit score. Even if you’ve paid off a credit card with no plans to use it again, keep the account open so it augments your credit history. A lengthy credit history shows lenders you’re adept at handling credit over a long period of time, which increases their trust in your ability to manage loans in the future. That will keep your credit score pretty healthy."(1)
5. Avoid cosigning
You may be asked to cosign on a loan or credit card in order to help someone, such as a family member, gain approval when they don't have the credit to do so themselves. While it may be worth it to you to do so, it can have a negative impact on your credit score, especially if that debt is run up. Additionally, you may find yourself ending up paying that debt off.
6. Refrain from taking out cash advances
Don't take out cash advances from your credit cards as a means of getting some quick cash. It may help you in the short term, but it can get expensive, while also hurting your credit score. This is especially true if your credit card balance is already on the higher end of the spectrum.
7. Don't take on too much debt
Avoid taking on too much debt at one time. It can easily add up when you add together a mortgage, a car payment, a student loan, and a credit card or two. Know when you're getting in over your head before it happens. The more debt you incur, the harder it will become to make all your payments on time. That will hurt your credit score, which is likely to suffer already from the increased debt itself.
Keeping your credit score in good standing is sometimes easier said than done. When life happens, your score may have to take the occasional hit. If you pay close attention to your score and make every effort to keep it in good standing, your financial future will be much more positive.
1. https://smallbizclub.com/finance/budgeting-and-personal-finance/5-surefire-ways-to-keep-your-credit-score-high/