Practical Habits for Maintaining Your Credit Score

credit score planning

Maintaining your credit score can be an art. If you have been spending years cultivating a good credit score, you want to be sure you are implementing the best practices for protecting your credit. Smart credit usage and maintaining a high credit score can deliver many advantages. Including the best interest rates on loans and qualifying for the best credit cards. And if and when an emergency arises, you know that you will be approved to borrow funds if you need to. Once you have reached a point where you are happy with your credit score, it is important to practice good financial management habits.

Pay your bills on time

Your payment history accounts for 35% of your credit score. It is the single most important factor that is taken into consideration when calculating your credit score. Therefore, be sure you pay all your bills on time. Enroll in autopay if and when you can.

Maintain a low credit utilization rate

After payment history, your credit utilization rate is the next. This is simply the amount of credit and loans you are using compared to your total credit limit. A good rule of thumb is to keep this rate below 30%. However, the most ideal rate is below 10%, but not 0%.

Refrain from opening new lines of credit

Keep in mind that 10% of your credit score is calculated from how many new credit accounts you’ve opened and how many credit checks are on your record. In addition, the length of your credit history accounts for another 15% of your score. Whenever you add a new credit line, the average age of your accounts drops.

Keep your personal information secure

Be sure to protect yourself against identity theft. Especially in the wake of the Covid-19 pandemic, online scams and the presence of fraudsters is on the rise. Don’t access accounts on any public wifi and if you are making an online purchase, be sure the site is secure. Be wary of suspicious emails and phone calls seeking your personal information. And lastly, make sure your accounts and computer are password protected.

Monitor all accounts closely

Keep a close eye on all your accounts – credit cards, banks accounts, bills, and loans. If something looks suspicious or inaccurate, you will be able to respond immediately. Especially with cards that you don’t use often. If you aren’t checking that account regularly, you could make a common mistake like missing payment for an annual fee.

Review your credit report regularly

You are entitled to one free copy of your credit report per year from each credit bureau. In fact, until April 2021, Equifax, Experian and TransUnion are all offering free weekly online reports. To access your credit report, simply go to Carefully review your report and take action if anything seems amiss.