When you think about all the time you spent removing negative items from your credit report, the last thing you want to do is assume your job is done. Good credit requires ongoing monitoring to ensure that you don’t lower your credit score. Once you get to your target credit score, don’t sit back on your laurels and think your job is done. Here are some tips to keep your good credit in shape and maintain that excellent credit score.
Monitor Your Credit Report
When repairing your credit, nothing is more important than going through your credit reports with a fine-tooth comb, disputing any and all negative listings. However, even if you manage to have all negative listings removed, this does not mean your job is done.
It is essential that you continue to keep an eye on your credit reports so you can catch any other negative listings that could pop up. You should do this at least once a year, though every six months is ideal. You are entitled to one free annual credit report from all three major credit reporting agencies, so you need only purchase three reports, for a nominal fee, once a year.
Use Available Credit Wisely
When potential lenders are assessing your creditworthiness, they want to see that you know how to manage existing debt. So the last thing you want to do is have open lines of credit you never use.
As a rule, try keeping your charged credit at 10 percent of the credit available to you. While this means keeping a balance on your credit cards and, in turn, paying some interest on the debt, it is well worth the benefit of proving you know how to keep and use credit in a healthy, responsible way.
Keep Paid-Off Credit Cards
It can be tempting to want to wish away the existence of the credit cards that got you into so much trouble. However, the more credit cards you have, the more your available credit, which reflects well on your overall creditworthiness.
Apply For New Lines of Credit In Moderation
Every time you apply for a new credit card, your credit takes a hit, so do so mindfully. This means carefully researching credit card offers and only applying for those that you are likely to be approved for and, more importantly, those that come with fees and interest rates you can live with.
Make On-Time Payments On Your Current Loans
The prior recommendations are all for naught if you make late payments. Again, this does not necessitate the need to pay your balance in full. In fact, that’s the opposite of what you want to do. However, you do want to maintain a low enough balance that makes it possible for you to keep your charged credit at 10 to 30 percent of your available credit each month.
Adjust Your Spending Habits
It may be that the best way to preserve your credit repair efforts, at least for now, is to stop at step one. For example, if you have a history of charging up whatever credit is available to you, and you don’t trust yourself with an open line of credit, by all means, cancel it. The hit you take for canceling a credit card pales in comparison to the damage that could be done by a credit card with a balance that gets out of control.
Adhering to these easy-to-follow rules will keep your credit in good shape year after year. Spending the time each year to review your credit reports and disputing any negative items that may pop up, will pay off with a high credit score and access to better interest rates.