You can do many things to keep up with the excellent FICO rating you’ve worked hard to achieve, and one fantastic motivation behind why you ought to mind: money. A decent FICO rating ordinarily implies lower financing costs, which means more money in the bank. It’ll likewise be more straightforward for you to get loans and a credit line.
Here are my best ways to keep up your financial assessment:
- When it comes time to pay your debts, treat them equally.
Your credit score considers both revolving (credit card) and tradeline or installment debt (mortgages). It makes no difference if your line of credit has a lower interest rate; you should not prioritize other loans if it means neglecting that payment. Having a balance on your credit cards all the time can lower your score and harm your chances of getting cleared for loans or other credit card accounts like EMI.
- Keep old credit cards open to keep up with the more drawn out history
There are some justifications for why keeping old cards open can help your FICO rating, and one is the length of your financial record, which represents 10% of your score. It is particularly significant for more seasoned cards since they give your credit report a more extended record.
- Consolidate your credit cards to have fewer balances.
Having several small balances spread across several cards may be an intelligent strategy, but it can backfire if you overuse it. Instead, you should pay these amounts as soon as possible. “Getting rid of nuisance balances is a good way to improve your credit score”. Having multiple cards with balances can lower rather than boost your score.
If you want to quickly pay off credit card debt, consolidate your monthly payments onto one card using one credit card.
- Ensure you take care of every bill on time, without fail
Your installment history represents 35% of your FICO rating. If you experience difficulty keeping your bills altogether and staying up-to-date with installments, set up electronic charging and installment alerts to stay steady over your bills. For those of you who don’t tend to monitor what to expect when relaxing, there is an app for you.
Assuming you’re not good with being on time, you can set up auto installment plans through your bank or with your Mastercard to guarantee that bills are paid for you, on time, consistently.
- Avoid carrying a balance on your credit cards.
Your credit utilization ratio is 50% if you have one credit card with a $1,000 limit and a $500 balance. Set a target of 30% or less. People with the highest credit scores use only about 8% of their available credit.
- Whenever possible, avoid applying for a new credit card.
New credit applications account for 10% of your total score. So every time you apply for credit and a hard inquiry is into your credit report, your score will suffer. If you want to keep your credit score high, avoid applying for new credit cards or loans unless necessary.