If you’ve just started establishing your credit history, it’s best to keep it free from derogatory marks and maintain good standing. Here are the ten steps in building a high credit score and keeping it on the top:
1. Get a copy of your credit report at least twice a year. Checking your credit report enables you to make sure that your payments are accurately recorded and that no false charges are placed under your account. It also allows you to check the status of your debts to your creditors.
2. Acquire good credit.
Not acquiring any debts at all in your account will not help you build your credit history. What can be considered as good debts? A mortgage loan is a good debt since a home property increases in value over the years. Credit card charges can also be considered as good debts if they are kept under control. The key is to acquire only the amount of debt that you can pay back on time.
3. Understand how you credit score is calculated.
Your credit score is rated based on several factors. These factors include the timeliness of your payments, the amount of your credit, your debt to income ration, and the type of credit you incurred. Understanding each aspect of your credit score will help you become more aware of your duties as a borrower.
4. Get support from a co-signer.
For those who haven’t started establishing credit, they can do so more easily by getting a co-signer who has excellent credit to guarantee for a loan or a credit card they’re applying for.
5. Get a student credit card.
Another way to build credit is by obtaining a student credit card while you’re still in college. Building your credit early will greatly boost your credit score as long as you keep your debts under control.
6. Get a secured credit card.
If you suffer from bad credit, you can still bounce back and build your credit rating slowly but surely. Apply for a secured credit card that reports to the major credit bureaus, pay your debts on time and keep within your credit limit. This is the best way to boost that low credit score.
7. Pay your credit card balance in full each month.
Don’t get used to the habit of paying only the minimum from your balances. As much as possible pay off your balance in full on or before your due date of payment. This will keep you from incurring interest, penalty fees and losing control over your bills.
8. Check your banking statement regularly.
Update yourself with your account from all your creditors. Credit cards usually provide online account access for their card holders. This is a feature that you must use to your advantage.
9. Notify your bank for delays in your bills.
If you didn’t receive your statement of account by mail, inform your bank immediately. Some people take this for granted not knowing that they have already been victimized by ID theft ID thieves often call the bank and ask for a change of address to prevent the victim from being alerted of their fraudulent activities.
10. Charge only what you can afford to pay.
If you have to borrow money just to pay for your bills, it’s to make drastic changes in your spending habits. If you have to use your credit card, make sure that you have the means to repay it on time.