These tips will help you maintain good credit standing. Keep your credit score high by avoiding new lines of credit. Also, pay all collection and charge-off accounts. It is also a good idea to keep your credit cards open so you can diversify your credit. This will keep you from accumulating large amounts of debt and will increase your credit score.
Don't apply for new credit
Avoid applying for credit cards. A new application can negatively impact your credit score. If you have existing debt, it is a bad idea to apply for credit lines. Instead, concentrate on paying off your existing credit cards and saving up to make a big purchase. Credit score is a key factor in determining whether you are eligible for the lowest rates on loans, credit card, or rental apartments.
Diversify your credit portfolio
The ideal mix of revolving and instalment credit is optimal. Revolving credit can be used in the easiest way possible. You simply need to open a card and make payments on time every month. Also, only charge what you can afford each month to prevent interest. If you don't have an installment loan yet, consider taking out a small personal loan to demonstrate that you are capable of managing both types of credit.
Recover any charges or collections owed
While it can be difficult to get rid off charge-offs or collection accounts, it is definitely worth trying. While this process will take a while, smart planning can help you accelerate the process.
Keep credit cards open
It is important to have at least one credit-card account in order to maintain high credit scores. It means that you use it frequently, and not just because you like the privilege of opening it. Multiple accounts can complicate tracking and raise fraud risk. Experts recommend keeping all accounts open. But it is best to keep one card.
Avoid making hard inquiries
A high number of loans or credit cards can lead to lower credit scores. Although one inquiry won't negatively impact your score, it is best not to make multiple inquiries during a year. Hard inquiries are recorded on your credit report for a year, and they stay there for two years. You should remember that not all credit decisions will be based on your credit score. Lenders may take into account other factors.
Don't close your credit card if you have balances on another card
You must avoid closing credit cards if you have balances on other cards in order to keep your credit score high. This is because your credit score relies on reporting activity on your accounts. The risk of being "credit invisible" is high if you cancel a card before paying it off. Some credit card companies will waive annual fee or convert fee cards to no-fee cards, if you pay the fees in a reasonable amount of time.