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Achieving and maintaining a “good” credit score is not rocket science, but you do need to be intentional. Below are some, simple habits to practice when using credit that will help keep your number on track.

Pay your bills on time, every time. One way to make sure your payments are on time is to set up automatic payments at the creditor’s website or from your bank’s online site. (Be sure you have sufficient funds in your account!) Also, don’t just pay the minimum amount if you can afford to pay more, because it will take you much longer to pay off the debt. Tip: People with the best credit scores are usually those who pay off their credit cards in full every month.

People with the best credit scores are usually those who pay off their credit cards in full every month.

Don’t get close to your credit limit. Credit scoring models look at how close you are to being “maxed out,” because the formulas predict that people who are using too much of their available credit may have future troubles with repayment. Experts advise keeping your use of credit at 30% or less of your total credit limit. Tip: If you close some credit card accounts and put most or all of your credit card balances onto one card, it may hurt your credit score, since you are using a high percentage of your total credit limit.   

Don’t apply for a lot of new credit in a short time, especially if you are getting ready to get a mortgage or a car loan. Your credit score may decline if you have too many credit accounts, and if you apply for or open a lot of new accounts in a short time. If you are planning to take out a big loan for a car or a house, be particularly careful not to apply for or open many new credit accounts just before applying for the loan, as it may negatively affect your score.

The longer your credit history, the better. Credit scores are based on experience over time. The more experience you have with getting and paying for your credit, the more information there is to determine whether you are a good credit risk.

Get your free credit report every year. Get free copies of your credit report from each of the big three consumer reporting agencies every year. If the information about you in the credit reports of the three large consumer reporting agencies is different, your credit score from each of the agencies will be different. How to find them:

Read your credit report and dispute any errors. If you find something wrong with your credit report, you need to fix it immediately. Write to both the consumer reporting agency and the creditor that provided the information to report the discrepancy, and include copies of any documents that support your position. When a consumer disputes credit report information, the agency and the creditor generally have to investigate and correct inaccurate information. For more information on annual credit reports, visit the FTC site.

Having trouble paying creditors? The sooner you talk to them, the more likely it is you can work something out, such as a temporary payment plan.

Be proactive in dealing with credit. Having trouble paying creditors? The sooner you talk to them, the more likely it is you can work something out, such as a temporary payment plan. If you need help, look locally for a credit counselor, but check to make sure they are trustworthy. If you are having trouble with your mortgage, there is help available through the government’s Making Home Affordable program or the HOPE Hotline at 888-995-HOPE. The Federal Trade Commission’s Building a Better Credit Report has information on correcting errors in your report, tips on dealing with debt and avoiding scams, and more.

Adapted from this article and this article by the Consumer Financial Protection Bureau

FOR MORE INSIGHT

On improving your credit score
Building credit from scratch (Consumer Financial Protection Bureau)
Building a Better Credit Report (Federal Trade Commission)

On annual credit reports
Free credit reports (Federal Trade Commission)

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