We have emphasized the importance of your credit score in previous posts on our blog. But raising your credit score is only the beginning. It is just as important to maintain that score. This may be easier said than done. Knowing how to manage credit is imperative, so let’s learn by example and take a look at a few things people with good credit never do.
1. Wait Until the Due Date to Pay Bills
When it comes to maintaining a good credit score, paying bills on time is rule number one. But paying off bills by the due date does not guarantee good credit. If possible, pay off your cards by the report date. This is the date when a creditor sends updates to credit bureaus. If your creditor sends reports to the credit bureau before the due date, it could appear that you are carrying a balance from month to month. When you pay by the report date, the creditor reports a zero dollar balance.
2. Open Retail Store Accounts
Individuals with good credit realize the impact of credit inquiries on their credit score. Each inquiry can reduce your credit score by five points. This may seem minor, but if you apply for multiple cards in a short period of time, those points add up. Is that really worth saving 15 percent on one purchase?
3. Rely on One Type of Credit
Many people find it safer to stick with one type of credit to keep finances simple. However, creditors consider diversification of accounts when determining your score. Having different types of accounts shows creditors you are able to manage multiple types of debt. This can have a positive impact on your score. A healthy mixture of accounts includes a credit card as well as an installment loan, such as a mortgage or auto loan.
Having a good credit score makes it easier to qualify for loans and lower interest rates, but it can be difficult to get there. If you need more advice on getting your credit score up, contact Sunset Bank. Fill out our online form or stop by one of our Waukesha locations.